Law Society issues compromise agreement warning

Law Society issues compromise agreement warning

The Law Society has issued a statement setting out its concerns as to ambiguity in the drafting of section 147 of the Equality Act and its effectiveness in relation to compromise agreements made under the Act.

Section 147 of the Act contains requirements to be fulfilled in order to have a qualifying compromise contract to settle claims arising under the Act which contains a requirement that the complainant receive advice from an ‘independent adviser’ about its terms and effect. The Society is concerned that the way the section is currently drafted suggests that a solicitor who was instructed by the employee prior to the production of the final agreement for consideration will be precluded from acting any further.

Whilst the Government Equalities Office has stated that ‘the situation that existed prior to passage of the Act’ remains unchanged and, by implication, that a solicitor who had advised a client in respect of an action would also be able to provide advice on a compromise agreement, this is not borne out by an advice which the Law Society has received from counsel. This takes the view that a court or tribunal would construe section 147(5)(d) as meaning that a solicitor who was instructed by the employee prior to the production of the final contract for consideration; or who has acted in any way for the employee during the course of his complaint ? even in a supporting role to the lead adviser perhaps as holiday cover ? will be precluded from acting any further as an independent legal adviser in that compromise contract.

Advice from counsel also indicates that a solicitor to whom the client was referred solely for the purpose of advising on the agreement would not be able to provide such advice.

The effect of this is that there is no way in which compromise agreements under the Equality Act can be made enforcible.

The Society has requested an urgent meeting with the Government Equalities Office to consider how this question can be resolved as well as notifying the Home Secretary of their concerns. The Society intend to issue a practice note on this issue shortly and we will ensure that a link is provided to that practice note.

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