On a literal interpretation of section 147 of the Equality Act 2010, it appears that a solicitor can no longer execute a Compromise Agreement settling a discrimination claim. The section, as it is currently drafted, appears to say that a lawyer acting for an employee cannot be an ‘independent adviser’ for the purposes of advising on a compromise agreement under the Equality Act. This effectively precludes any lawyer from qualifying as an ‘independent legal adviser’ as soon as they are consulted by an employee. This is a ludicrous result.
Presumably, this ambiguity has been created by a simple drafting error but a grey area arises nonetheless. The Law Society has requested that the Home Secretary and Government Equalities Office look into the issue and provide clarity, as a matter of urgency.
Whilst many have insisted that the law remains unchanged, caution is undoubtedly required. Whilst awaiting any authority on the point, it would be prudent for all such agreements to be dealt with by ACAS by way of COT3 Agreement. Alternatively, solicitors should be advising their clients of the theoretical loophole and the scope for an attempt to avoid the agreement.
In practice, I suspect the risk is minimal. Any court asked to order that the money be returned to an employer on the basis of section 147 would be very reluctant to make that finding. In addition, any employee bringing a tribunal claim on that basis would be likely to have their claim struck out under rule 18(5) as being an abuse of process.
[The information and commentary contained in this blog does not, and is not intended to, amount to legal advice and does not form the professional advice or opinion of any Solicitor or Law Firm]
The Employment Lawyers Association recently surveyed 500 of its members and the results were almost unanimous - no less than 94% believe Section 147 (5) does create a potential issue! Watch this space!
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