Settlement of claims

Claims or potential claims in the Employment Tribunal can be settled by means of a compromise agreement which is drafted, terms agreed and then signed by both parties and the employee’s solicitor. A compromise agreement is often very detailed, complex and lengthy.

However, if an ACAS officer is involved in an employment dispute the parties can agree terms recorded by the ACAS officer and often an agreement to settle is reached on very simple terms.

Where an ACAS officer is involved, if an “offer” is made by one party and it is “accepted” by the othere party the agreement is binding. This is illustrated by a recent case where an employment consultant, when speaking to his opponent an employment solicitor, offered to settle the case for £1,000. The solicitor telephoned ACAS after consulting his client and informed the ACAS officer that the £1,000 offer had been accepted. Because the ACAS officer had “taken action” to settle the case it was binding.

This case serves as a warning to parties including their solicitors who make an “offer” either over the telephone or in writing and then subsequently seek to introduce additional terms into the agreement.

So, if a party or its solicitor writes and says ‘we offer £1,000 to settle and this our final offer’ once, that is accepted and they cannot introduce additional terms by suggesting that the original “offer” was in principal only. So when making an “offer” you must be clear as to the terms of the offer or specify that the offer is conditional on other terms being agreed.