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Settlement agreements: Unknown future claims cannot be waived by settlement agreements

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By Zoë Wigan, Ceri Fuller and Hilary Larter


Published 16 November 2022


The Scottish EAT has held that settlement agreements cannot be used to settle unknown future claims.


Mr Bathgate was employed for nearly 20 years until he was made redundant.   He signed a settlement  agreement under which he waived claims against his employer.  The agreement set out a list of claims which were waived. This included age discrimination, provided for payment in lieu of notice, an enhanced redundancy payment, and for an “additional payment” to be paid a few months later.  The terms of this additional payment were governed by a collective agreement, which provided that it was only payable to employees who had not reached the age of 61.  It was subsequently decided that Mr Bathgate was not entitled to the additional payment, as he was 61.  He brought a claim of age discrimination.

Mr Bathgate’s employer argued that Mr Bathgate had waived his right to bring an age discrimination claim, and the employment tribunal agreed.  Mr Bathgate appealed to the Scottish EAT on the grounds that legislation governing the settlement of claims did not permit settlement of claims before they have arisen.  

In considering the claim, the Scottish EAT considered whether the settlement agreement prevented Mr Bathgate from bringing further claims against it. 

In reviewing existing case law, and considering the intent of Parliament in relation to the relevant legislation, the judge held that the legislation does not allow settlement agreements to settle future claims which are unknown to the parties at the time of entering into the agreement. The requirement in the legislation to identify the “particular complaint” to be settled is not satisfied by a long list of claims and settlement should only be available in the context of an agreement which settles a particular complaint that has already arisen between the parties.  In this case, Mr Bathgate could not have known about, or have had in mind, that he was settling this “particular complaint” at the point he signed the settlement agreement because the facts of the age discrimination claim had not crystallised. 

Ultimately, the EAT rejected the age discrimination claim on separate jurisdictional grounds.


This decision shows that future claims of which the parties are unaware at the date of a settlement agreement will not be waived validly by settlement agreements.  This is in contrast with COT3 agreements, where such claims may be validly waived, as long as the wording is sufficiently specific and unambiguous. 

This decision also throws doubt on the effectiveness of the common practice of including a list of potential claims in settlement agreements, some of which may not have been in the contemplation of the employee when signing.   Employers should consider tailoring settlement agreements to summarise the circumstances leading to the settlement agreement and specifically mention the claims being waived as far as possible, to reflect the particular claims which the employee has intimated or which are otherwise obvious from the circumstances. In most circumstances, high value claims such as discrimination and whistleblowing should also be listed.  Other irrelevant claims should not be listed, including, for example, pregnancy and maternity where the employee who is settling their claims is male. However, there is clearly a balance to be struck between precision and creating uncertainty over whether the settlement really is full and final.

It will also be helpful for employers to consider including a short preamble about the background to the settlement and to ensure that the warranty in respect of the employee having taken advice on all relevant claims is as robust as possible.

Bathgate v Technip UK Ltd