In Glasgow City Council v Dahhan, Dahan (D) entered into a settlement agreement with the Council. D’s claims for discrimination, harassment and victimisation were then withdrawn. Two weeks later, D wrote to the ET stating that he had lacked the capacity to instruct his solicitor and to make decisions at the time of entering into the agreement. The ET decided that it had jurisdiction to set aside a settlement agreement on the ground that D did not have the mental capacity to enter into a contractually binding settlement. The Council appealed arguing that case law has determined that a settlement agreement can only be set aside where, upon it being entered into, there was misrepresentation, economic duress or a mistake.
The EAT rejected the appeal, holding that a distinction between agreements induced through error or misrepresentation and those purportedly entered into by a party who lacked capacity is artificial and unsound. The law requires the ET to consider the validity of any settlement agreement and if on the evidence, a lack of capacity is proved, the ET can declare the agreement as unenforceable. Those using or advising on settlement agreements are therefore advised to ensure that claimants are fully fit and able to understand and accept the terms of the agreement, during negotiations and when signing, and this fact is recorded in the agreement.
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The aim is to provide summary information and comment on the subject areas covered. In particular, where employment tribunal and appellate court cases are reported, the information does not set out full details of all the facts, the legal arguments presented by the parties and the judgments made in every aspect of the case. Click on the links provided to access full details. If no link is provided contact us for further information. Employment law is subject to constant change either by statute or by interpretation by the courts. While every care has been taken in compiling this information, SM&B cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.
This provides summary information and comment on the subject areas covered. Where employment tribunal and appellate court cases are reported, the information does not set out all of the facts, the legal arguments presented and the judgments made in every aspect of the case. Employment law is subject to constant change either by statute or by interpretation by the courts. While every care has been taken in compiling this information, we cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.
