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However, the EAT considered the Tribunal’s decision to be wrong.
It said that not all pressure will amount to duress, that it was inevitable that during the course of negotiations one side would seek to exploit the other’s apparent weakness and that the availability of cheap and quick procedures to employees (employment tribunals) was an important antidote to the inequality of bargaining power inherent in an employment relationship.
Decision The Court of Appeal (Underhill, Briggs and King LJJ) overturned the County Court’s decision and ruled that the settlement agreement was binding, although it expressed some regret in doing so.
Key to the court’s reasoning was the conclusion that the insurer’s entry into the agreement had not been induced by the claimant’s statements in the relevant sense.
This may mean that employees are more likely to succeed in an argument of unequal bargaining power if they challenge the validity of settlement and COT3 agreements.
The Employment Appeal Tribunal (EAT) in in 1996 defined economic duress as a combination of pressure and the absence of practical choice.Disagreeing with the lower court, the Court of Appeal held that, for the purpose of establishing reliance, it was not sufficient that a litigant took into account the risk that its opponent’s evidence would be believed by the judge, although it did not itself believe the evidence.Briggs LJ noted that it is an everyday feature of litigation for parties to be “influenced” by their opponent’s factual pleadings in that sense when assessing whether to settle and at what level.Background An employee brought proceedings against his employers in respect of a workplace injury.The employers’ insurer conducting the defence admitted liability but disputed quantum, primarily on the basis that the employee had exaggerated the extent of his ongoing condition.
Since July 2013 employees are required to pay an issue fee and a hearing fee (up to £1,200) before they can enforce their individual rights against an employer.