How is a breach of a settlement agreement enforced?

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Concerned about what happens if you breach a settlement agreement?

Regardless of whether you’ve employer or employee has caused a breach of a settlement agreement, the team of expert solicitors at Freeman Jones explains the potential consequences of breaching this contract and how these penalties can be enforced against both parties.

Consequences of breaching a settlement agreement

Is there a penalty for breach of a settlement agreement in the UK? Once you’ve signed on the dotted line, you’ve entered into a legally binding contract and can therefore open yourself up to a whole world of legal trouble if you fail to follow the agreed-upon terms.

From financial repercussions to reputational damage following being taken to court, there can be many consequences of breaching a settlement agreement for employers and employees alike, but how are these penalties enforced?

How is a breach of a settlement agreement enforced?

Breach of a settlement agreement by an employee

Following a breach of a settlement agreement by an employee, you must send them a letter to highlight their breach of contact, complete with any details of evidence you have to support this claim. After allowing them sufficient time to respond (often 14 days), you can move on to taking action.

Depending on which provisions have been included in the agreement, you may be able to recover money paid to the employee. A repayment provision, for example, can help businesses to recover the compensation paid to the employee after the settlement agreement was signed.

More commonly, however, these contracts will include an indemnity provision from the employee to employer to help cover them against any losses that might occur due to a breach of a settlement agreement by employee. These provisions are generally enforceable through Employment Tribunal.

Breach of a settlement agreement by an employer

If there has been a breach of a settlement agreement by an employer, on the other hand, then the employee who has been wronged can bring a breach of contract claim against the employer.

As a result, one of the biggest consequences of breaching a settlement agreement for an employer is that you could end up in costly, reputation-damaging, and time-consuming Employment Tribunal or Country Court.

This would typically result in the employee being suitably compensated for any losses they’ve suffered due to the employer’s breach of a settlement agreement.

Professional settlement agreement support

If your employer or employee has breached the terms of your settlement agreement, don’t allow their actions to impact your future. Instead, reach out to the team of experts here at Freeman Jones Solicitors to find out how we can help with our dedicated settlement agreement services.

On top of explaining what happens after a settlement agreement is breached and how to deal with it, our experienced team can also provide you with professional support when both creating and negotiating settlement agreements.

Regardless of whether you want to learn more about the consequences of breaching a settlement agreement or you have a more specific question relating to your own settlement agreement, please don’t hesitate to book your free, no-obligation, 20-minute consultation with our expert team today.

You can get in touch by either calling us on 01244 506 444, sending your enquiry via email to, or using our online contact form.

Alternatively, why not visit your closest Freeman Jones Solicitors branch? We’ve opened offices in Chester, Liverpool, Warrington, and Wrexham, but we are more than happy to meet at another, more convenient location, if desired.

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Author Colin Freeman View Profile
Colin qualified as a solicitor in 1998. He specialises predominantly in family law, litigation / dispute resolution, wills, probate and settlement agreements and has notable cases reported in the Court of Appeal and High Court.
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