How Much Should We Offer? Pricing a Settlement Properly

Employers usually start with a number that feels fair. That is the wrong starting point.

Start with the cost of not settling. What is the claim worth if it succeeds? What will defending it cost regardless of outcome? How much management time disappears? What will disclosure surface? Settlement is priced against that total.

What genuinely moves the figure. Service and notice entitlement. Whether the claim is capped or uncapped — discrimination and whistleblowing have no ceiling. The strength of your procedure so far. Whether the employee has found other work. Whether you need enforceable covenants and confidentiality, both of which require real consideration.

Structure matters as much as quantum. Notice, holiday, compensation and the tax treatment of each. Getting the split wrong can cost more than the negotiation saved.

Terminology across the UK. In England, Wales and Scotland these are settlement agreements. In Northern Ireland, compromise agreement remains the term in use. GB conciliated settlements go through Acas in a COT3; NI settlements through the Labour Relations Agency are recorded in a CO3 — binding once agreed, even verbally.makeuk+2Want a realistic number before you make an offer? 0121 256 8043.