Settlement Agreements and Misrepresentation

Does a tribunal have the power to set aside a COT3 agreement?

ACAS COT3 agreements are those legally binding agreements between parties (usually in the context of an on-going employment tribunal case, using the services of ACAS). Recognised in law, and broadly similar in effect to settlement agreements, they set out the terms of an agreement between the parties, in writing.

In the recent case of Cole v Elders Voice, the Employment Appeal Tribunal ruled that a tribunal does have the power to set aside a COT3 agreement in cases where misrepresentation by the other party is alleged. In this particular case, the EAT ruled that it was an error of law for a tribunal not to have permitted a litigant in person to refer to without prejudice material in support of an argument that a COT3 should not be relied on due to misrepresentation. This material may become very relevant, even though negotiations are considered to be on a ‘without prejudice’ basis, if the employee/claimant states that they would not have agreed to the COT3 but for misrepresentation.

Employers must be careful not to mislead or misinform employees when discussing terms for a settlement agreement/COT3, as any discussions that take place during negotiation could prove admissible as evidence in a subsequent tribunal hearing.