As my role as a settlement agreement solicitor I advise and represent employees in the resolution of claims and disputes with their employer. Settlement agreements are intended to provide finality and certainty to an employee’s dispute with their employer. However, circumstances can arise where an employee can still challenge the validity of a settled agreement even after they have signed it. This is not a straightforward process, but it is possible.

Grounds for Challenging a Settlement Agreement

Several grounds can be used to challenge a settlement agreement, each requiring the employee to provide compelling evidence in support.

Duress or Undue Influence

This can arise when an employee is pressured or coerced into signing their agreement. The pressure placed on the employee to sign must be significant, going beyond normal commercial pressure. It will be necessary for the employee to demonstrate how and in what circumstances their free will was overridden.

Misrepresentation

‍If an employer provided false or misleading information that induced their employee to enter the agreement, it can be challenged. The misrepresentation can be fraudulent, negligent, or innocent, but it must have been a material factor relied on by the employee when deciding to settle.

Mistake

‍If an employee can prove that they were genuinely mistaken about one or more of the terms of their settlement agreement, or the events leading up to their decision to settle their employment dispute, then provided the mistake was fundamental and radically different from what was intended or understood they can ask a court to set aside the agreement or correct it to give effect to the original understanding and intention of both the employee and their employer.

Lack of Capacity

‍If an employee lacked the mental capacity to understand their agreement, it can be challenged. This might involve issues like mental illness, intoxication, or being a minor.

Breach of Contract

‍Should the employer fail to uphold their obligations under the settlement agreement, the employee may have grounds to challenge it. This is less about invalidating the agreement and more about the employee asking a court or tribunal to enforce the terms of the agreement or award compensation for the breach.

Unconscionable Bargain

‍This involves a situation where an employer takes unfair advantage of their employee’s vulnerability or disadvantage. It requires demonstrating a significant imbalance in bargaining power and an agreement that is grossly unfair.

Legal Considerations and Case Law

Courts approach challenges to settlement agreements with caution. However, they also recognise that fairness and justice must prevail.

In cases involving duress or undue influence, a court will examine the nature and extent of the pressure exerted on the employee. If an employer puts undue pressure on an employee to sign a settlement agreement in a truly brief period of time, without allowing the employee to seek legal advice, this can be considered as undue influence.

Misrepresentation cases require proving that the misrepresentation was material and induced the agreement. A court will consider whether a reasonable person would have been influenced by the misrepresentation.

When considering mistakes in settlement agreements, a court will examine if the mistake was fundamental enough to make the contract void.

Practical Considerations

Seek Legal Advice

‍If you are considering challenging a settlement agreement, it is crucial to seek legal advice from a qualified solicitor specialising in settlement agreements.

Gather Evidence

‍You will need to collect all relevant documentation, including the settlement agreement itself, correspondence, and any other evidence that supports your case.

Act Promptly

‍Delays can weaken your case. You should act as soon as you become aware of grounds for challenging the agreement.

Alternative Dispute Resolution

‍Consider exploring alternative dispute resolution methods, such as mediation, to resolve the issue.

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I founded Settlement Agreement Experts with the purpose and objective of providing employees faced with signing a settlement agreement with a quick, simple and no-cost independent legal review and advisory service. For advice on your settlement agreement get in touch today, call 0330 043 8845, email clive@solicitor.help, or request a call back.