Settlement Agreements
Based in Lymington, Hampshire, Scott Bailey’s expert settlement agreement solicitors regularly support businesses and individuals across Southampton, Bournemouth, Winchester, and the South. Drawing on their significant experience, our team will guide you through the process and ensure you achieve the best possible outcome.
Contact our employment solicitors
What is a settlement agreement?
Settlement agreements are often used by employers as a means to resolve disputes with employees that could potentially lead to an employment tribunal. In order to settle the dispute, the employer will enter into a legally binding agreement to provide the employee with a specified amount of money, cease any unlawful treatment, or both, in exchange for the employee agreeing not to pursue a claim against the company.
How much do solicitors charge for settlement agreements?
We believe in clear and transparent pricing. The cost of settlement agreement advice will depend on the complexity of your agreement and the level of negotiation required. For most employees, the fee for reviewing and advising on a standard settlement agreement in 2025 is £500 + VAT. This covers:
- Reviewing the agreement in full;
- Advising you on its terms and implications; and
- Signing the adviser’s certificate to confirm that you have received independent legal advice.
If your agreement requires further input – for example, where there are bonus payments, significant settlement sums, restrictive covenants, share options, more than one meeting is required, or basic additional negotiation with your employer is required – the fee is usually between £750 – 850 + VAT. Where a reaffirmation agreement is also required (for instance, following a period of garden leave), an additional fee of £250 + VAT applies to cover the second stage of advice and certification.
In most cases, your employer will contribute towards your legal costs, and this contribution often should cover our standard fee in full. We will always discuss any potential shortfall with you in advance, so you can make an informed decision with complete transparency.
What is a reasonable settlement agreement?
Employment settlement agreements can be used to resolve a wide range of employment disputes, from unfair dismissal to discrimination or sexual harassment. As a result, determining what constitutes a reasonable settlement agreement varies depending on the merits of your case and the specific circumstances surrounding it.
Typically, for a case of unfair dismissal, compensation would be around two to three months’ gross salary. However, for more serious allegations, the compensation amount may significantly increase.
In addition to compensation for contract termination, you should also receive payment for any remaining salary, benefits, accrued or unused annual leave, and notice pay up to your termination date.
Other payments that may be included in the agreement include bonus payments, commission payments, or a contribution towards outplacement services, training costs, or relocation costs.
If your employer requires you to accept a non-disclosure agreement within the settlement agreement, which is quite common, your settlement agreement may also include an additional payment in exchange for your cooperation (but generally it is just wrapped up in the main settlement sums).
If you have been offered a settlement agreement and would like to speak to one of our specialist employment law solicitors near Southampton and Bournemouth, please contact our team.
Are settlement agreements taxable?
In most cases, the first £30,000 of compensation or ex gratia payments resulting from an employment settlement agreement are tax-free. However, other payments included in the settlement agreement may be subject to tax. If you would like to find out how much you can expect to receive from your settlement agreement, get in touch with us and we would be happy to help.
How to negotiate a settlement agreement?
When it comes to negotiating an employment settlement agreement, it is important to know how much your case is worth, use the process to your advantage, conduct yourself professionally, and consider any non-financial benefits you would like included in the agreement, such as a positive reference. Unless you are an expert on settlement agreements, working this all out can be challenging. Whilst you will be required to seek independent legal advice during the process, seeking legal advice as early in the process as possible will put you in the strongest position when it comes to negotiating. At Scott Bailey, our team of experienced employment settlement agreement solicitors are experts at navigating the process and can help you achieve the best possible outcome.
Can an employee request a settlement agreement?
Yes, as an employee, you can request a settlement agreement. Whilst typically it is the employer that offers a settlement agreement, if you feel your position is becoming untenable due to your employer’s behaviour or your working conditions, a settlement agreement is an effective way to terminate your employment whilst ensuring you are fairly compensated. If you would like advice on requesting a settlement agreement, contact us today, and we can guide you through the process.
Our lawyers solve problems
like yours every day.
We would like to hear from you. Please send us a message by filling out our form or contact us using the details below.
Phone: 01590 676933
Fax: 01590 679663
Scott Bailey LLP, 63 High Street, Lymington, Hampshire, SO41 9ZT
