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How much for legal advice on a settlement agreement?

View profile for Reggie Lloyd
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How much for legal advice on a settlement agreement?

Often queries are raised when a solicitor is asked to sign a settlement agreement and they give a fee quote of £500 or more to do that work.

It is sometimes assumed that the solicitor merely has to “rubber stamp” the agreement by signing it, but this is not correct. 

As a regulated profession, solicitors must undertake money laundering checks before opening a file. The client must be sent relevant information and the terms of the service they are providing must be set out in writing.

Once the file has been opened, the solicitor is obliged to:

  • review the settlement agreement
  • advise on terms and effect of the agreement, and,
  • advise that if the agreement is signed the employee will waive his or her rights to pursue claims

A recent Employment Appeal Tribunal case commented that £500 to cover legal advice on a settlement agreement is sufficient only to advise on the “terms and effect of the proposed settlement”. £500 is not adequate if the solicitor is also required to give advice about the merits of the potential claims and the likely award of compensation.

This case might encourage employers to increase their offers to contribute to legal costs under the terms of settlement agreements.

If you need advice about a settlement agreement, contact our team of specialist employment solicitors for a free, no obligation 15 minute telephone conversation. I am an employment lawyer based in our Colchester office and I can be contacted on 01206 217347 or