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Compromise Agreements

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The Court of Appeal has overturned the EAT's decision in Hinton v University of East London, holding that it is necessary for a compromise agreement to expressly specify the cause of action being settled in order to be effective.

Mr Hinton had raised (amongst other things) a claim under s47B of the Employment Rights Act 1996, claiming he was subjected to a detriment for making a protected disclosure.

He entered into a compromise agreement. The agreement started with a recital stating that he was agreeing to compromise all his claims. It then went on to list various causes of action but, probably through error in the drafting, did not refer expressly to a s47B claim.

The employment tribunal held that his s47B claim had not been compromised under a valid compromise agreement, so he could bring his claim. The EAT disagreed, holding that the recital at the beginning covered all claims, and the list was simply illustrative rather than exhaustive.

The Court of Appeal reinstated the ET's decision. Mummery LJ (giving the leading judgment) stated that a compromise agreement must specify the particular statutory claim being compromised or - at the very least - the factual basis of the claim (para. 22). A general 'catch-all' recital was insufficient as it did not make it clear what the "particular proceedings" (the wording from s203) being compromised were.

Hinton v University of East London CA 2005