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Personal injury claims and compromise agreements

by Redmans Solicitors on April 9, 2013

In this post we’re going to take a brief look at personal injury claims and how they should be dealt with in compromise agreements. This will involve an examination of the following elements:

  1. What is a compromise agreement?
  2. Can personal injury claims be waived under a compromise agreement?
  3. How should personal injury claims in a compromise agreement be dealt with?

What is a compromise agreement?

A compromise agreement is a contract regulated by statute that allows employers and their employees to settle potential or existing claims in the Employment Tribunal or the civil courts. In return for waiving their right to pursue particular common law or statutory claims, the employee will receive “consideration” in the form of financial or non-financial benefits (such as the payment of a sum of money or the provision of a reference).

Can personal injury claims be waived under a compromise agreement?

Under a compromise agreement an employee agrees to waive particular statutory or common law claims against their employer, including unfair dismissal, wrongful dismissal, breach of contract, discrimination and harassment (among others). However, there are generally exclusions to the claims that can be waived in relation to claims for accrued pension rights and for personal injury caused by the actions or omissions of your employer.

Under a compromise agreement an employer may wish to obtain a waiver for any personal injury claims. This could relate to claims that have already been brought, existing claims of which the employee is not aware, and claims which have not yet arisen. In respect of the first two types of claim, an attempt to include these in a compromise agreement would probably be valid. However, it is not deemed fair for an employer to exclude liability for claims which have not yet arisen.

How should personal injury claims in a compromise agreement be dealt with?

Such matters should be dealt with in compromise agreements very carefully. The employee should seek expert legal advice from an employment law solicitor or personal injury solicitor on the value of any existing or potential claims for personal injury and may wish to price these into the value that has been placed on the compromise agreement, otherwise they are not being compensated for the loss of their rights in this respect. However, the particular value to be placed on these rights would depend upon what type of personal injury claim the employee has, how strong the claim(s) would be, and what value could reasonably be placed on those claims. If your employer tries to exclude liability for future personal injury claims then you may wish to resist this as these rights could become important in the future. For example, compromising a potential future asbestosis injury now could lead to problems in the future if this injury does manifest itself – you would have no recourse against your employer if they had been negligent or had breached a statutory duty.

Redmans Solicitors are compromise agreement solicitors based in London

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