Compromise agreements under Equality Act may not be enforceable, warns Law Society

The Law Society has requested an urgent meeting with the Government Equalities Office amid concerns there is no way that compromise agreements under the Equality Act 2010 can be made enforceable.

In a statement issued yesterday, Chancery Lane said it was aware of ambiguity in the drafting of s.147 of the 2010 Act. The section outlines the requirements that must be met in order to have a qualifying compromise contract to settle claims arising under the Act.

The Law Society said the key issue was the requirement for complainants to receive advice from an “independent adviser” about the agreement's terms and effect.

“The way this section is currently drafted suggests that a solicitor who was instructed by the employee prior to the production of the final agreement for consideration will be precluded from acting any further,” Chancery Lane added.

According to the Law Society, the GEO has argued that “the situation that existed prior to passage of the Act” remains unchanged and, by implication, that a solicitor who had advised a client in respect of an action would also be able to provide advice on a compromise agreement.

However, advice from a QC instructed by the Law Society disagreed with that position.

Chancery Lane’s statement said: “The advice indicates that a court or tribunal would construe section 147(5)(d) as meaning that a solicitor who was instructed by the employee prior to the production of the final contract for consideration; or who has acted in any way for the employee during the course of his complaint – even in a supporting role to the lead adviser perhaps as holiday cover – will be precluded from acting any further as an independent legal adviser in that compromise contract.

“Advice from counsel also indicates that a solicitor to whom the client was referred solely for the purpose of advising on the agreement would not be able to provide such advice.”

It added: "The effect of this is that there is now way in which compromise agreements under the Equality Act can be enforceable".

The Law Society, which has notified the Home Secretary of its concerns, said it would issue a practice note shortly.