How to review a settlement agreement before you sign — what the figure should reflect, the tax treatment, references, and the independent-advice requirement.
A settlement agreement waives your right to bring listed claims in exchange for a payment. The review checks which claims are being waived, whether the figure reflects your notice, accrued holiday, bonus, and any discrimination or unfair-dismissal exposure, and whether anything is being signed away too cheaply.
Termination payments can be partly tax-free up to the statutory threshold, but notice pay and some elements are taxable — getting the allocation right matters. Check the agreed reference wording, confidentiality and non-derogatory clauses, and whether restrictive covenants are being reaffirmed or relaxed.
A settlement agreement is only binding if you have received advice from a relevant independent adviser (usually a solicitor) on its terms and effect. The Counsel prepares you for that conversation — a clear issue list and questions — so the regulated advice is faster and cheaper.
Not until you understand what you are waiving and whether the figure is fair, and not before the required independent legal advice. The Counsel produces an issue list and questions so your adviser meeting is efficient — but the sign-off advice itself must come from a regulated adviser.
Some of it. A genuine compensation element can be tax-free up to the statutory threshold, while notice pay and contractual sums are normally taxable. The allocation in the agreement affects what you keep, so it is worth checking before signing.
Yes — the agreement is only legally binding once an independent adviser has advised you on its terms, and the employer usually contributes to that cost. Use The Counsel to prepare, then take the required advice.
The Counsel is an AI tool for England & Wales. It provides legal information, not legal advice, and does not replace a regulated solicitor. For anything high-value or contested, take advice before you act.
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