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Settling a claim against a respondent you don’t trust

You can settle your case by withdrawing it, or agreeing to withdraw it, in return for your former employer’s promise to pay you some money. (It’s normally mainly money, though sometimes there will be other things you want, like a decent reference.)

But suppose you don’t trust your former employer further than you could spit a rat? That makes it difficult to set much store by their promise. What makes you think they will keep it?

There are two thoughts worth having in mind for this situation. One is that in the normal way of things, when you settle, what you’re doing is trading in your ET claim for a contract with the respondent under which they have to pay you some money. The contract isn’t actually money, but it entitles you to a defined sum of money; and if the respondent doesn’t pay what they’ve promised to pay, you have a claim for breach of contract that is much more straightforward than your ET claim would have been. So you’ve swapped a claim of uncertain value for a claim of very clear value. If it’s sensible bargain, it’s worth having even the respondent makes difficulties about paying – because if they do, you can be sure they’d have made just as much difficulty about paying an employment tribunal award.

So in general, ‘I don’t trust them to pay’ won’t be a good reason not to settle.

All the same, there are a couple of things you might be able to do to improve your position. One is to ask for a cash payment. If you’re settling for several thousand pounds, this will probably only work if you have a few days at least before the hearing: most respondents won’t come to tribunal with a fat wad of £50 notes in their pocket, just in case. Another option (which may be more practical if you’re negotiating at the door of the tribunal) is to ask for a cheque. You might want to ask for a personal cheque if you’re afraid that the company that employed you might cease to exist rather than pay you what it owes you. Or you could ask for an immediate BACS payment straight into your bank account.

2 comments

  1. Stephen Poster

    One approach I have used on behalf of a client where the respondent was impecunious / not trusted but represented was to ask for the settlement money to be paid into the respondent’s solicitor’s client account. The solicitor and I discussed and the wording of the COT3. However, I would not “agree” the COT3 till I received a side letter from the solicitor that she was in funds and instructed to release the money to my client within seven days of receiving a signed COT3.

    This worked very well.

  2. Pete

    If a respondent refused to settle not because of the sum involved was too high but because of ego and refusing to stand down can that be considered in the tribunal if he tries to recover costs should he win ?

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