Who pays for settlement agreement legal advice?

Why advice is mandatory

A settlement agreement waives your right to bring employment tribunal claims, and section 203 of the Employment Rights Act 1996 makes that waiver binding only if you have received advice from a relevant independent adviser, usually a solicitor, who is identified in the agreement and carries professional indemnity insurance. No advice, no valid waiver: which is why employers insist on it as much as employees.

Who actually pays

• The employer contributes in almost every case. A contribution of £350–£500 plus VAT is the typical 2026 range we observe for a straightforward sign-off, written into the agreement and paid directly to your solicitor on completion.
• Straightforward review and sign-off is usually covered in full by that contribution, so the advice costs you nothing.
• Negotiating the deal up is different. If you instruct the solicitor to renegotiate terms or run correspondence, fees can exceed the employer's contribution; agree the basis (fixed fee, hourly, or a percentage of any uplift) before that work starts.
• The contribution is not taxed as your income provided it is paid under a term of the agreement, direct to the adviser, for advice on the termination.

If no contribution is offered

Ask for one; it is standard and refusing it is a signal worth reading. An employer who wants a binding waiver needs you to take the advice, so the request almost always succeeds. Acas's guidance on how settlement agreements should be handled, including reasonable time to consider an offer (Acas recommends at least 10 calendar days), is at acas.org.uk.

Figures quoted are typical 2026 contributions and vary with seniority and complexity; senior-executive agreements commonly carry higher contributions. This page is general information, not legal advice.