Equality Act 2010, section 147

Meaning of “qualifying settlement agreement ”

Part 10 Contracts, etc.

(1)This section applies for the purposes of this Part.

(2)A qualifying [F183settlement agreementF183] is a contract in relation to which each of the conditions in subsection (3) is met.

(3)Those conditions are that—

(a)the contract is in writing,

(b)the contract relates to the particular complaint,

(c)the complainant has, before entering into the contract, received advice from an independent adviser about its terms and effect (including, in particular, its effect on the complainant's ability to pursue the complaint before an employment tribunal),

(d)on the date of the giving of the advice, there is in force a contract of insurance, or an indemnity provided for members of a profession or professional body, covering the risk of a claim by the complainant in respect of loss arising from the advice,

(e)the contract identifies the adviser, and

(f)the contract states that the conditions in paragraphs (c) and (d) are met.

(4)Each of the following is an independent adviser—

(a)a qualified lawyer;

(b)an officer, official, employee or member of an independent trade union certified in writing by the trade union as competent to give advice and as authorised to do so on its behalf;

(c)a worker at an advice centre (whether as an employee or a volunteer) certified in writing by the centre as competent to give advice and as authorised to do so on its behalf;

(d)a person of such description as may be specified by order.

(5)Despite subsection (4), none of the following is an independent adviser [F184to the complainantF184] in relation to a qualifying [F183settlement agreementF183] —

(a)a person [F185(other than the complainant)F185] who is a party to the contract or the complaint;

(b)a person who is connected to a person within paragraph (a);

(c)a person who is employed by a person within paragraph (a) or (b);

(d)a person who is acting for a person within paragraph (a) or (b) in relation to the contract or the complaint;

(e)a person within subsection (4)(b) or (c), if the trade union or advice centre is a person within paragraph (a) or (b);

(f)a person within subsection (4)(c) to whom the complainant makes a payment for the advice.

(6) A “qualified lawyer”, for the purposes of subsection (4)(a), is—

(a)in relation to England and Wales, a person who, for the purposes of the Legal Services Act 2007, is an authorised person in relation to an activity which constitutes the exercise of a right of audience or the conduct of litigation;

(b)in relation to Scotland, an advocate (whether in practice as such or employed to give legal advice) or a solicitor who holds a practising certificate.

(7) “Independent trade union” has the meaning given in section 5 of the Trade Union and Labour Relations (Consolidation) Act 1992 .

(8)Two persons are connected for the purposes of subsection (5) if—

(a)one is a company of which the other (directly or indirectly) has control, or

(b)both are companies of which a third person (directly or indirectly) has control.

(9)Two persons are also connected for the purposes of subsection (5) in so far as a connection between them gives rise to a conflict of interest in relation to the contract or the complaint.

Definitions used in section 147 4

employment

“employment” and related expressions are (subject to subsection (11)) to be read with section 83;

Defined in s.212(1) · see it in the full Act
Member

(10) “Member”, in relation to an occupational pension scheme, means an active member, a deferred member or a pensioner member (within the meaning, in each case, given by section 124 of the Pensions Act 1995 ).

Defined in s.212(10) · see it in the full Act
profession

“profession” includes a vocation or occupation;

Defined in s.212(1) · see it in the full Act
trade

“trade” includes any business;

Defined in s.212(1) · see it in the full Act

Cases considering section 147 5

Ian Clifford v IBM United Kingdom Ltd

[2024] EAT 90 · 10 June 2024Interprets

A qualifying settlement agreement exists only when each statutory condition is met. The only disputed condition was whether the agreement related to the particular complaint. (see paras [42]-[43]; [100]) The requirement that a settlement relate to the particular complaint requires clear identification of the claim type. It does not impose a temporal bar on settlement of a future claim whose factual basis did not exist when the agreement was made. (see paras [105]-[112])

Charles Melvin Bathgate v Technip UK Limited & Ors

[2022] EAT 155 · 7 October 2022Interprets

The requirement that a settlement agreement relate to the particular complaint permits settlement only of an actual or known complaint. A generic list of claim types or statutory sections cannot settle an unknown future discrimination claim. The agreement was therefore ineffective in respect of the age-discrimination claim (see paras [23]-[31]; [53]).

Glasgow City Council v Dahhan

[2016] UKEAT 0024_15_1105 · 11 May 2016Defines

Section 147 defines a qualifying settlement agreement by reference to writing, the particular complaint, signature, independent advice and a statement that advice was received. Those formal conditions do not remove the need for substantive contractual validity. (see paras [16]-[17])

What each judgment says about section 147 is in the case-law panel in the full Act.

Explanatory note

474.This section sets the conditions under which a compromise contract settling a case can be lawful, even though it seeks to limit the application of the Act under section 144.

475.It must be a written contract which meets each of the following conditions: the contract must be tailored to the circumstances of the claim, the complainant must have received independent advice from a named person who is insured or indemnified against the risk of a claim against him arising from that advice, and the contract must state that the conditions about independent advice and insurance have been met.

476.The section describes who can be an independent adviser and includes a power to add new descriptions of people who may be independent advisers in the future. It makes clear that a conflict of interest prevents a person being an independent adviser.

477.The section replaces provisions in previous legislation which had the same purpose. The power to add to the kinds of person who may be independent advisers could be used to add, for example, Fellows of the Institute of Legal Executives employed by a solicitors’ practice.

All the explanatory notes for the Act

Amendments and notes

5 notes from legislation.gov.uk

Amendments

  1. F182Words in s. 147 heading substituted (29.7.2013) by Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 23(6), 103(3); S.I. 2013/1648, art. 2(c)
  2. F183Words in s. 147(2)(5) substituted (29.7.2013) by Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 23(6), 103(3); S.I. 2013/1648, art. 2(c)
  3. F184Words in s. 147(5) inserted (6.4.2012) by The Equality Act 2010 (Amendment) Order 2012 (S.I. 2012/334), art. 2(2)
  4. F185Words in s. 147(5)(a) inserted (6.4.2012) by The Equality Act 2010 (Amendment) Order 2012 (S.I. 2012/334), art. 2(3)

Commencement

  1. I61S. 147 wholly in force at 1.10.2010; s. 147 not in force at Royal Assent see s. 216; s. 147(4) in force for certain purposes at 6.7.2010 by S.I. 2010/1736, art. 2, Sch.; s. 147 in force at 1.10.2010 in so far as not already in force by S.I. 2010/2317, art. 2(1)(10)(b) (with art. 15)