Withdrawals and Settlements of Tribunal Claims

Employment tribunal claims do not always proceed to a full hearing. Often, disputes are withdrawn or settled before a hearing, saving time, cost and stress for all parties. Understanding what withdrawal and settlement mean, the steps involved, legal effects, and practical issues helps claimants and respondents manage tribunal claims effectively. This guide explains the relevant legal processes, procedural requirements, key differences between withdrawal and settlement, and answers common questions for readers with or without legal knowledge.

Withdrawal and Settlement Explained

A tribunal claim may end in one of two main ways before a final hearing:

• Withdrawal, where the claimant decides to discontinue their claim; or
• Settlement, where the claimant and respondent reach an agreement to resolve the dispute, often involving payment, terms and a formal contractual agreement.

Both withdrawal and settlement stop the tribunal process, but they differ in legal effect, how they are documented and what rights remain after the process ends.

Withdrawal of Tribunal Claims

What Withdrawal Means

Withdrawal means the claimant chooses not to pursue the claim further. This can happen at any point before or even during the hearing. When a claim is withdrawn, the tribunal will issue a dismissal judgment, and the claimant generally cannot bring a subsequent claim on the same issues. However, in rare situations, the claimant can express a wish to reserve the right to bring the same claim again if there is a legitimate reason, and the tribunal agrees this is fair.

Procedure for Withdrawal

To withdraw a claim, the claimant must inform:

• the employment tribunal in writing; and
• the respondent (the other party).

This should be done as soon as possible after deciding to withdraw. If the claim is already listed for hearing, letting the tribunal know promptly avoids unnecessary preparations and costs.

If withdrawal is part of a settlement, it is usually documented in the settlement agreement itself, requiring the claimant to write to the tribunal to withdraw.

Legal Consequences of Withdrawal

When a claim is withdrawn:

• the tribunal issues a dismissal judgment;
• the claimant typically cannot start another claim on the same grounds; and
• procedural effects such as time limits and enforcement of documents from the tribunal are concluded.

Some claimants may choose to reserve the right to bring a future claim if circumstances change, but this is an exception and requires tribunal approval.

Settlement of Tribunal Claims

What Settlement Means

A settlement is a negotiated agreement between the claimant and respondent that resolves the dispute without continuing to a tribunal hearing. Settlement usually includes an agreed payment and sometimes other terms such as references or confidentiality clauses. Settlement ends the need for a hearing and is legally binding once documented.

Types of Settlement Agreements

There are two key types of formal settlement in the tribunal context:

COT3 Agreements

A COT3 is a conciliation agreement recorded by an Acas conciliator:

• It reflects terms agreed during conciliation between the parties.
• It is a “full and final” settlement of the dispute covered by the agreement.
• Once agreed, the claimant will not be able to bring a tribunal claim on the matters included.

A COT3 may be reached before or after a claim is lodged, including during early conciliation or at any stage up to the hearing.

Settlement Agreements (Compromise Agreements)

A settlement agreement under section 111A of the Employment Rights Act 1996 is a private contractual agreement:

• It must be in writing and specify the particular claims being settled.
• The employee must receive independent advice on its terms from an authorised adviser, such as a solicitor or trade union official, supported by appropriate professional indemnity insurance.
• It often includes detailed terms on payments, taxation treatment, notice, references, and employment matters.

Settlement agreements can settle existing tribunal claims and anticipated claims reasonably expected to arise.

How Settlement Works in Practice

Settlement usually arises through:

• Early conciliation with Acas, where a conciliator assists negotiations;
• Direct negotiation between parties, possibly with representatives; or
• Offers “without prejudice”, meaning the content of offers cannot be used in tribunal if talks fail.

Once terms are settled, they are incorporated into a COT3 or settlement agreement which may state that the claimant will withdraw any existing claim as part of the settlement.

Confirming and Enforcing Settlement Terms

After a COT3 is agreed, an Acas conciliator writes up the document for signature by both parties. It is legally binding, and the parties must adhere to its terms. If payment or other obligations are not fulfilled, enforcement mechanisms exist. For example, the employment tribunal penalty enforcement scheme allows steps like court enforcement if payment is not made.

Practical Considerations When Withdrawing or Settling

Timing

Withdrawal and settlement can occur at any stage before the final hearing, including if the hearing is already listed. Settlement negotiations may continue up to or even during the hearing process.

Notification

When settlement is reached, either the claimant or an Acas conciliator should notify the tribunal immediately so that the case is removed from the hearing list and the tribunal file can be closed appropriately.

Legal Advice

For settlement agreements requiring independent advice, claimants must obtain advice from a qualified adviser, and this adviser must be expressly named in the agreement. The agreement is not legally enforceable without confirmation that these conditions have been satisfied.

Scope of Settlement

Whether a claim is settled via COT3 or through a settlement agreement, it is critical to ensure that the terms clearly list the specific claims covered. Ambiguous wording may lead to disputes later about what was settled or what rights remain.

Risks and Common Questions

Can a claim be reinstated after withdrawal?
Normally no. Once a claim is withdrawn and dismissed by the tribunal, the claimant cannot raise the same dispute again unless they specifically reserve the right and the tribunal agrees there is a legitimate reason to do so.

Does settlement mean confidentiality?
Settlement agreements often include confidentiality and non‑disparagement clauses, but confidentiality depends on what the parties agree rather than an automatic legal requirement.

What if settlement payment is not made?
A COT3 or settlement agreement is enforceable. If payment is not made, options include Acas contacting the respondent to remind them, use of the employment tribunal enforcement scheme, or applying to court for enforcement.

Key Takeaways

Withdrawing or settling a tribunal claim allows parties to resolve disputes before a hearing and avoid formal litigation. Withdrawal terminates the claim, with the tribunal dismissing it unless a reservation of rights is agreed. Settlement - whether through an Acas COT3 agreement or a settlement agreement - resolves legal disputes and often requires contractual terms and independent advice. Both processes require clear communication with the tribunal and respondent, and settlement terms should be carefully drafted to cover specific claims and obligations. Timely negotiation and documentation help secure a binding and enforceable resolution that meets parties' interests.