Settlement agreement reached then retracted: tribunal finds binding COT3 despite change of mind
A former employee who claimed constructive unfair dismissal lost her case when the tribunal ruled that a binding COT3 settlement had been reached, even though she tried to withdraw before the agreement was signed.
1 min read · Last updated 18 May 2026
Case details
- #binding-settlement
- #cot3
- #acas-conciliation
- #ostensible-authority
- #constructive-dismissal
Key facts
- The claimant resigned on 3 March 2022 and claimed constructive unfair dismissal.
- The respondent offered to settle on a 'drop hands' basis on 23 November 2022.
- The claimant's solicitor initially accepted the offer on 28 November 2022.
- Negotiations broke down over a reference clause (6.6) on 21 December 2022.
- The respondent agreed to remove the disputed bullet point at 17:04 on 21 December 2022.
- The claimant's solicitor later asked ACAS to hold off declaring a binding agreement.
Timeline
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Claimant resigned
The claimant resigned from her role as Early Help Worker at Kent County Council.
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Claim presented
The claimant presented a claim of unfair dismissal to the Employment Tribunal.
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Respondent filed response
The respondent filed its grounds resisting the claim.
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Settlement offer made
The respondent's solicitor emailed the claimant's solicitor offering to settle on a 'drop hands' basis.
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Claimant's solicitor accepted offer
The claimant's solicitor replied that the claimant was willing to accept the offer and requested a COT3 agreement.
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Draft COT3 sent
The respondent's solicitor sent a draft COT3 agreement to ACAS and the claimant's solicitor.
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Claimant requested amendment
The claimant's solicitor requested removal of the third bullet point in clause 6.6 (reference to disciplinary investigation).
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Agreement reached and retracted
At 17:04 the respondent agreed to remove the bullet point. At 17:10 the claimant's solicitor asked ACAS to hold off declaring a binding agreement.
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Preliminary hearing
The tribunal heard evidence and submissions on whether a binding settlement had been reached.
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Written reasons issued
Employment Judge Braganza KC issued written reasons finding a binding agreement had been reached.
The legal issue
The tribunal had to decide whether a binding settlement agreement was reached via an ACAS COT3, even though the claimant's solicitor asked ACAS to hold off declaring it binding shortly after the respondent accepted the final term.
The outcome
The tribunal dismissed the claimant's unfair dismissal claim for want of jurisdiction, ruling that a binding COT3 settlement had been reached on 21 December 2022.
Key reasons:
- The claimant's solicitor had ostensible authority to accept the offer on 28 November 2022.
- The respondent agreed to remove the disputed bullet point in clause 6.6 at 17:04 on 21 December, completing the agreement.
- The claimant's later request to ACAS to hold off did not undo the already-concluded contract.
No compensation was awarded as the claim was dismissed.
Lessons & takeaways
- A settlement can become binding even before a COT3 is signed, if the essential terms are agreed and communicated.
- Solicitors usually have ostensible authority to bind their clients to settlement terms, even without express instructions at every step.
- Once a binding agreement is reached, a change of mind or request to delay does not automatically invalidate it.
- If you want to reserve the right to withdraw, make that a condition of the offer or acceptance explicitly.
When a settlement is final — even before the paperwork is signed
This case shows how quickly a settlement can become binding in employment tribunal proceedings. The former employee resigned and claimed constructive unfair dismissal. After negotiations, her solicitor accepted a 'drop hands' offer from Kent County Council. The parties then exchanged drafts of a COT3 agreement.
The sticking point was a clause about a disciplinary investigation. The claimant wanted it removed. At 17:04 on 21 December 2022, the council agreed. Six minutes later, the claimant's solicitor asked ACAS to hold off declaring a binding agreement. But the tribunal found that the agreement was already concluded.
What the losing side could have done differently
The claimant argued she had not given final instructions and had not signed anything. However, her solicitor had ostensible authority to accept the offer. Once the council agreed to the final term, a contract was formed. The tribunal noted that the solicitor's request to ACAS was not a withdrawal of the agreement — it was too late.
To avoid this outcome, the claimant could have made it clear that any agreement was subject to her personal approval or signature. Alternatively, she could have instructed her solicitor not to accept any variation without her express consent.
Why this matters for similar claims
This decision reinforces that settlement negotiations can crystallise into a binding contract quickly, especially when solicitors are involved. Claimants who have second thoughts should act before the other side accepts their final proposal — not after. The case also highlights the importance of understanding that a COT3 does not need to be signed to be effective; the key is whether the parties have reached agreement on all essential terms.
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