Clause 16 of the Enterprise and Regulatory Reform Bill will have the effect of renaming compromise agreements “settlement agreements”.
Long ago, when the government first began consulting on what it then termed “resolving workplace disputes”, this measure was justified as follows:
“We believe this more accurately describes their content and will help to avoid any party refusing to sign an agreement on the grounds that they do not want to be seen as ‘compromising’. We also believe that “settlement agreement” is a more widely understood term, being used in the treatment of contract claims. We will make this change in primary legislation”.
The stupidity of the process is of course that parties do not refuse to sign agreements out of a fear of being seen to compromise. No research has ever suggested that a change of name was necessary, neither has there been a single employment case ever in which a Judge noted how unfortunate it was that compromise agreements had such a misleading name.
Compromise agreements are a perfectly well understood system; there was no need to change them beyond the hyperactive desire of ministers to be seen to be doing “something” to reduce the (non-existent) epidemic of Tribunal claimss.