Who pays for advice in a compromise agreement?

SlyOne_2

I know most of you would say the company usually does. However, here's the situation:

I was made redundant from a large professional services firm (one of the biggest) and appealed the decision and understandably was refused. I was then re-offered a compromise agreement (which was there since before I appealed) and one of the clauses in there is that the firm would pay for legal fees for me to obtain advice regarding the dismissal and for entering in the agreement.

Based upon said advice, I elected not to sign the compromise agreement. However, the firm has now turned round and said that they will not pay for the legal fees I incurred in getting that advice as I will not sign their document. I specifically asked HR about this orally when I was being made redundant and was told that they would pay no matter what. However, this was verbal and was not put in writing by said HR person.

Ergo, I am now faced with either signing the agreement or paying up for rather substantial legal fees of up to £500 which I thought I would not have to pay for. And according to the lawyer I contracted, the compromise agreement wording, although it seems to indicate that the firm would pay up irrespective of the advice provided, is not enforceable as it was not signed by me.

This is a pretty sick twist I feel. Anybody else encounter a similar problem? I am planning to go to the ET anyway.

Pee

Hmm... having signed off a few compromise agreements, I ought to know the answer to this one. And I'd feel bad were I your solicitor for not having mentioned that you could end up paying.

I think the position must be that if you don't sign, they don't have to pay, as that is what it says in the agreement. I hate to say go after your solicitor, but I think you should try to discuss it and at least agree a reduction. (I always used to charge top whack for these as the company were paying and the client wanted the last penny they could get out of the firm usually, wheras if I thought someone made redundant was paying, my costs could have halved.)

SlyOne_2

Thanks for your response, it's helpful to know there is some leeway for negotiation. However, the agreement does not state that they will not pay if I choose not to sign, merely that they will pay for independent legal advice.

I have gone on and submitted the ET claim anyway now. I guess I will try and agree to repayment terms with the solicitor.

This is very bad though, I did not need that legal advice. I only thought that I had to get a lawyer to see the compromise agreement before I went to ET to cover all the bases.

latecomer

If it simply states that they will pay for independent legal advice then thats what they should do.

SlyOne_2

latecomer wrote: »

If it simply states that they will pay for independent legal advice then thats what they should do.

Anyone would agree but the issue is that the compromise agreement is issued without prejudice and unless I sign it, it is not an enforceable document and none of the statements it contains (including the offer to pay for independent legal advice) can be relied upon in court.

Debt_Free_Chick

SlyOne wrote: »

Based upon said advice, I elected not to sign the compromise agreement. However, the firm has now turned round and said that they will not pay for the legal fees I incurred in getting that advice as I will not sign their document.

Difficult to advise without seeing the agreement, but most tie the payment of the legal fees in with "the settlement", so if there's no settlement there's nothing to add the legal fee on to.

I specifically asked HR about this orally when I was being made redundant and was told that they would pay no matter what. However, this was verbal and was not put in writing by said HR person.

hhhhmmmmmm........ I'm a bit surprised they answered this one, unless the question is common. I've certainly never had the question asked and never thought about it before. I can only imagine that the HR person was mistaken, but that doesn't help you.

Ergo, I am now faced with either signing the agreement or paying up for rather substantial legal fees of up to £500 which I thought I would not have to pay for. And according to the lawyer I contracted, the compromise agreement wording, although it seems to indicate that the firm would pay up irrespective of the advice provided, is not enforceable as it was not signed by me.

That's my view - that the fee is part of the agreement and the agreement is not contractual unless it's signed.

This is a pretty sick twist I feel. Anybody else encounter a similar problem? I am planning to go to the ET anyway.

Surprised you're going to ET - I assume that the company will not pay what you want and you are confident that the ET will award more than is offered in the agreement? Is that the advice you've had?

ceridwen

Well...actually...at a practical level...HOW would anyone manage to physically get the money out of you to pay that solicitor?? - as in...could they actually manage to:cool:

But - I would have thought that its not up to you to pay anyway - I understood that the whole idea is that the company pays regardless - dont forget how often firms "bend the truth" shall we say regarding what they say to employees. It could be that they are just telling you that you will have to pay for that legal advice now as a way to put pressure on you - NOT because thats the way things really are.

I gave up counting how many lies/terminal inexactitudes/skating over things my employers have done over the years some time ago - mind you counting their lies to me could make a change from "counting sheep" as a way of getting to sleep at night;):D

Debt_Free_Chick

Employers don't pay "regardless" - the circumstances are quite narrow. The requirement is for the employee to take advice to ensure they understand the terms of the agreement and, especially, what their obligations are e.g. not to bring a claim at tribunal. Effectively, it's just a "quick consultation" and not any protracted discussions, negotiations or advice on going to tribunal instead (save, to say, that the employee has that option).

The requirements are in s203 of Employment Rights Act 1996 especially subsection 3c.

I've signed four or five in my time and each time the employer's fee has never been enough to cover my fees. Why? Because my solicitor negotiated more money in every case and I had to pay for him to do that.

If a CA has been suggested and the solicitor has advised that it's correct and above board, then it would be signed and the fee would be paid.

If the solicitor is advising otherwise, then it's difficult to see that the company should pay for that "other advice", as it's clearly not the advice that they've agreed to pay for.

What I don't understand is why the OP is going to ET - surely, you would only do this if you were very, very confident of getting a better result i.e. more money, which would cover the costs of going to ET AND leave you with plenty leftover.

As is often the case with many threads, it seems that there might be more to this

SlyOne_2

Debt_Free_Chick wrote: »

What I don't understand is why the OP is going to ET - surely, you would only do this if you were very, very confident of getting a better result i.e. more money, which would cover the costs of going to ET AND leave you with plenty leftover.

As is often the case with many threads, it seems that there might be more to this

Hi,

There are other claims associated with the unfair dismissal too and a training contract that has been left unfulfilled. The amount proposed by the firm amounts to less than a month's salary in terms of cash and what they propose towards my training will not cover it all and I cannot afford to finish off the rest on my own, so it is pretty pointless to me. Either they pay it all or not. So realistically I only stand to lose 1 month's pay by not signing and that is a gamble I am prepared to take. I think my chances at the ET are rather strong although I would not get cocky about it - there is still a chance I would lose. However, on a personal note, I feel better with myself having gone through the process seeking justice than just being paid off on a month's salary. In terms of further costs, I've elected to represent myself.

My solicitor was not able to negotiate anything further for me on the original compromise agreement and I do not feel their offer was adequate.

Debt_Free_Chick

SlyOne wrote: »

Hi,

There are other claims associated with the unfair dismissal too and a training contract that has been left unfulfilled. The amount proposed by the firm amounts to less than a month's salary in terms of cash and what they propose towards my training will not cover it all and I cannot afford to finish off the rest on my own, so it is pretty pointless to me.

How long have you employed by them? And what kind of contract (employee or "training" with "strings attached")?

Either they pay it all or not.

On the face of it, I agree. You should not be out of pocket due to the dismissal, but it really depends on your contract

So realistically I only stand to lose 1 month's pay by not signing and that is a gamble I am prepared to take. I think my chances at the ET are rather strong although I would not get cocky about it - there is still a chance I would lose. However, on a personal note, I feel better with myself having gone through the process seeking justice than just being paid off on a month's salary. In terms of further costs, I've elected to represent myself.

You have to be sure that the ET would award more - and to an extent, that depends on your contract.

My solicitor was not able to negotiate anything further for me on the original compromise agreement and I do not feel their offer was adequate.

Be careful, please. Big employers use big lawyers and they are usually clear of their position. I speak as an HR person "in a big employer, using a big City lawyer" and we would not settle with you unless we were sure that our case was stronger than yours.

I am very happy to give you my view if you want to post more about your situation, but I fully understand if you decide not to do so.

Good luck whatever you do - and please post the outcome if you feel able to as it may help others (and me!!) for future threads.