COT3 settlement upheld: former employee's capacity challenge fails
An employment tribunal dismissed all claims after finding they were settled by a COT3 agreement, and refused reconsideration. The claimant was ordered to pay £1,750 + VAT in costs.
1 min read · Last updated 18 May 2026
Case details
- #cot3-agreement
- #settlement
- #reconsideration-refused
- #costs-awarded
Key facts
- The claimant's claims were dismissed because they were settled by a COT3 agreement.
- The claimant argued he lacked mental capacity when signing the COT3, but medical evidence did not support this.
- The claimant accepted he was not pressured by the respondent to sign the COT3.
- The claimant's application for reconsideration was refused as there was no reasonable prospect of varying the judgment.
Timeline
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Hearing and judgment
Employment Judge Lambert dismissed all claims, finding they were settled by a COT3 agreement. The claimant was ordered to pay £1,750 + VAT in costs.
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Judgment sent to parties
The written record of the judgment was sent to the parties.
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Reconsideration application
The claimant emailed grounds for reconsideration, arguing he could not raise certain issues, evidence on duress/mental health should be reconsidered, and he could not cross-examine a witness.
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Reconsideration refused
Employment Judge Lambert refused the application, finding no reasonable prospect of varying the judgment.
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Reconsideration judgment sent
The written reasons for the reconsideration refusal were sent to the parties.
The legal issue
The tribunal had to decide whether the former employee's claims had been settled by a binding COT3 agreement, and whether he lacked mental capacity when entering into that agreement.
The outcome
The tribunal dismissed all claims, including unfair dismissal, age discrimination, and disability discrimination, because they had been settled by a COT3 agreement reached through ACAS.
The claimant argued he lacked mental capacity when signing the COT3, but the medical evidence he provided related to several months after the agreement and did not support his assertion. He also accepted that he was not placed under any pressure by the respondent to sign.
- The claimant was ordered to pay £1,750 + VAT in costs.
- An application for reconsideration was refused as there was no reasonable prospect of varying the judgment.
Lessons & takeaways
- A COT3 agreement reached through ACAS is legally binding and will settle all claims covered by it, even if you later regret signing.
- To challenge a settlement on grounds of mental capacity, you need medical evidence that directly relates to the time you signed the agreement.
- If you are unsure about signing a settlement, take legal advice before doing so — the tribunal may not allow you to back out later.
- Reconsideration is not a second chance to argue your case; it is only granted if something went radically wrong with the procedure.
When a settlement agreement is final
This case shows how difficult it can be to challenge a COT3 settlement agreement after it has been signed. The former employee argued that he lacked mental capacity when he entered into the agreement, but the tribunal found that the medical evidence he provided did not support that claim — it related to issues several months after the signing.
The tribunal also noted that the claimant had been urged to take legal advice at a preliminary hearing and confirmed he had done so. He accepted that the respondent had not pressured him into signing. As a result, the COT3 was binding, and all his claims — for unfair dismissal, age discrimination, and disability discrimination — were dismissed.
What the respondent did right
Linde Material Handling (UK) Ltd followed the proper process by involving ACAS and obtaining a signed COT3. The tribunal also noted that the claimant had been given opportunities to seek advice and had confirmed he wished to proceed. This likely strengthened the respondent's position that the settlement was valid.
Why this matters
For anyone considering signing a settlement agreement, this case is a reminder that such agreements are difficult to overturn. If you have concerns about your mental capacity at the time of signing, you will need clear medical evidence from that period. Simply feeling unwell or stressed later is unlikely to be enough. Taking independent legal advice before signing is the best way to avoid regrets later.
The tribunal also refused the claimant's application for reconsideration, emphasising that reconsideration is not a chance to re-argue the case — it is only for situations where something has gone radically wrong with the procedure.
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