Settlements
7 min read
What a settlement agreement is actually buying
The number at the top is the part everyone negotiates. The clauses underneath it are the part that follows you into your next job, and they are usually drafted far wider than the payment justifies.
Elliot Vance
Partner · Executive practice
In short
Warranties can undo the payment — read them before the figure.
Annex the agreed reference; a promise in an email is not enforceable.
Ask for confidentiality and non-derogatory terms to be mutual.
Independent advice is a statutory requirement, not a formality.
Two sides of the same table, an hour before the figure moved.
The figure is the smallest part of the document
Negotiations concentrate on the payment because it is the only term with an obvious number attached. The clauses that follow it — confidentiality, non-derogatory statements, the agreed reference, warranties about what you have and have not already done — travel with you into your next role and are enforceable long after the money is spent.
Read the warranties first. A standard agreement will ask you to warrant that you know of no claims other than those settled, and sometimes that you have not breached your contract in ways you have not been asked about. A warranty you cannot honestly give is not a drafting quirk; it is a route to clawing the payment back.
What is worth negotiating that is not money
The reference is usually the most valuable non-financial term and the easiest to agree, because it costs the employer nothing. Ask for the wording to be annexed to the agreement rather than promised in correspondence. A reference described in a covering email is not a term you can enforce.
Mutual confidentiality and a mutual non-derogatory clause are also standard requests and are frequently granted simply because nobody asked. An agreement that silences only one side is an agreement drafted for one side.
You are not being paid for the claim. You are being paid for the silence, the reference and the restrictions.
What to do next
Send the draft and the deadline you have been given. Most first drafts are improvable in the terms that matter, and most employers expect them to be improved.
This note is general information about the law in England and Wales. It is not advice on your situation, and time limits are short — take advice before you act.
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