Compromise agreement meaning

Preparatory steps Secure the employee’s most recent employment contract, together with any variations, related correspondence forming part of the contract, and any company handbook considered contractual Verify the employee’s continuous service particulars, including the employment start date and the dates of any contract amendments during employment Gather pension details: whether the scheme is defined benefit or defined contribution, and whether all employer contributions are fully up to date Identify the basis for the settlement-e.g., in respect of a Workplace Relations Commission (WRC) claim, a redundancy payment, a personal injury claim, or another legal claim Where multiple claims are being resolved, ensure agreement with the employer on how the overall settlement is apportioned to each claim, and that both parties clearly understand the tax treatment of each amount Ascertain any shares or share option schemes held by the employee, paying close attention to any definitions relating to leaver status that apply...

Claims can be settled at any point in the litigation process This can occur pre-action and during proceedings. From the outset, practitioners should carefully and repeatedly assess the scope for compromise. Securing an early, proportionate agreement is a laudable aim to keep under consistent review. Regard Part 36 as a vital mechanism because its cost consequences concentrate minds. Consider the following questions: • ...

Introduction This Flowchart sets out the procedure for securing the court’s approval of a settlement in a child’s case. It steers practitioners from the point of a proposed agreement to the approval hearing, covering when to commence proceedings, the paperwork needed for approval, how to address future losses and periodical payments, and how the court evaluates if the compromise is fair and reasonable...

TCPC Management Ltd v Windrush Alliance UK Community Interest Company [2024] EWHC 683 (Ch) What are the practical implications of this case? The ruling confirms that, once parties have concluded a settlement agreement, the liability identified in that document is the figure that grounds a winding-up petition (and any earlier statutory demand). There remains the scope for such an agreement to be avoided for fraud, or voidable on other recognised bases. Yet this judgment demonstrates—consistent with many before it—that merely flagging a potential dispute is inadequate. Two points were pursued: Fraud: the evidential footing came perilously close to Micawberism—little more than the hopeful expectation that something might turn up. Regulatory limits: the suggestion that the company’s role as a social housing provider imposed constraints also fell away on a straightforward interpretation of the Companies Act 2006. In consequence, the court treated the sum in the compromise as the operative debt for insolvency purposes, and neither speculative fraud assertions nor an uncontroversial...

Re Madagascar Oil Ltd [2025] EWHC 1015 (Ch) What are the practical implications of this case? This judgment marks the first reported approval of an English restructuring plan that splits two creditors into separate classes, establishing a benchmark for using the fewest possible classes to ring-fence objecting creditors. Businesses can be more confident about placing creditors into tailored classes even where they would share the same insolvency ranking, provided the plan delivers materially different outcomes for them. The ruling endorses recognition of divergent creditor interests where it is not feasible for those creditors to confer with a view to their common interest... What was the background? Madagascar Oil Ltd (MOL) is a Mauritian-incorporated company with its head office in the UK. It forms part of a group that includes its operating subsidiary, Madagascar Oil SA (MOSA), and its parent, BMK Resources Ltd (BMK). The group holds exclusive rights to develop a technically challenging oilfield in Madagascar; however, production is currently suspended and the group is in...

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What is a CVA? A company voluntary arrangement (CVA) is a form of insolvency that permits a company to enter a binding agreement with its creditors to compromise unsecured debts or otherwise agree how its affairs are handled. The directors continue to run the business, under the oversight of an insolvency practitioner. Retailers, particularly those with extensive property portfolios, frequently adopt so‑called ‘landlord CVAs’ to reset rental commitments and shut loss‑making stores. This note outlines how property law and landlord and tenant considerations may emerge under such a CVA. It highlights provisions commonly included in CVAs and explains how they tend to work in practice. Nevertheless, each CVA will vary according to the precise terms proposed. It is therefore vital to examine the CVA proposal carefully to assess its effect on creditors. This note does not provide detailed guidance on the mechanics of approving and implementing a CVA. For Practice Notes addressing the CVA procedure, see: Company voluntary arrangements—an introductory guide The CVA proposal and...

This Practice Note explores the place of costs in international arbitration proceedings. Further guidance on this topic appears in Practice Notes: AA 1996—costs, Interest on costs and damages in arbitration, Costs and fees of key arbitral institutions, and the ‘Related documents’ pod. To compare the answers to questions relating to arbitration costs (and funding) in jurisdictions around the world, please consult our International Comparator Tool. Relevance of costs in international arbitration This review of costs is aimed chiefly at two objectives—enabling arbitrants to keep expenditure under control and, where they succeed, to recover it from the opposing side. Unchecked dispute costs can rapidly make pursuit of proceedings uneconomic and cause disputants to regret commencing proceedings. By understanding the different categories of cost, parties can introduce greater control and help ensure that the sums incurred are recovered from the opponent...

This Practice Note This Practice Note sets out a hands-on framework for dealing with disagreements about the proper construction of a contract. It draws on the principles of contractual construction contained in the following Practice Notes and should be considered alongside that guidance: Contract interpretation—the guiding principles Contract interpretation—rules of contract interpretation The situations in which such disagreements emerge are endlessly diverse. Yet, whether it surfaces as a client approaching you about an unforeseen demand from a contracting counterparty, or as the reply from a third party on whom you have served such a demand, the core refrain is the same—‘that’s not what was agreed’. Once that contention is made, practitioners will typically seek to conclude the dispute promptly and without resort to costly proceedings. A firm understanding of how a court would tackle the construction of the disputed term(s) will allow you to make assured decisions about whether it is in the client’s best interests to litigate if a satisfactory compromise...

Definitions Partner(s) • refers to EITHER: [ the following: [ insert names of partners ] OR those [ insert type of group, eg councils or academies in a geographical area or a type of public body ], as described in the Find a Tender service (FTS) Notice. ] The expression Partner(s) shall be understood accordingly. Partner Contract • denotes any arrangement, whatever its form, between the Supplier and the Partner(s) that stems from this Agreement. 1 Use of Agreement by Partner(s) The Supplier accepts and agrees that the Buyer has entered into this Agreement for its own benefit and for the benefit of the Partner(s). Beyond supplying the [ Goods OR Services OR Works ] to the Buyer under this Agreement, the Supplier shall also supply such [ Goods OR Services OR Works ] to any Partner that makes a request, PROVIDED THAT doing so shall not disrupt, compromise, or diminish the level of service the Supplier provides to...

This Agreement is dated [ insert day and month ] 20[ insert year ] Parties The Consenting Lenders (as set out in Schedule 1); [ The Consenting Bondholders (as set out in Schedule 2); ] [ insert name of debtor company ], a company registered in [ insert country eg England and Wales ] with company number [ insert registered number ], whose registered office is at [ insert address ]; [ The Material Companies (as set out in Schedule 3); ] Recitals On [ insert date ], the directors of the Company announced a proposal to restructure the claims of certain creditors of the [ Company OR Group ] following a period of financial distress. On [ insert date ], the Company and certain creditors entered into a Standstill Agreement in connection with the proposed restructuring. [ On [ insert date ], the Company and certain creditors agreed non-binding heads of terms for the...

Definition Partner means [ the following: [ NAME RELEVANT PARTNERS ] OR those [ describe group of contracting authorities eg Councils or academies in a limited geographical area or a class or type of public body ] as stated in the Find a Tender (FTS) and/or Contracts Finder Notice; ] and Partner(s) shall be interpreted accordingly. 1 Use of Agreement by Partners 1.1 The Supplier acknowledges and agrees that the Buyer has entered into this Agreement for the benefit of itself and the Partners. 1.2 In addition to supplying the [ Goods OR Services OR Works ] to the Buyer under this Agreement, where: 1.2.1 the Supplier has been issued a written instruction by the Buyer to deliver [ Goods OR Services OR Works ] to the Partner(s) under this Agreement; and 1.2.2 the Supplier confirms to the Buyer that providing such [ Goods OR Services OR Works ] will not interfere with, compromise, or reduce the...

Where an employee may hold potential claims against their employer under the Employment Rights Act 1996 (or under other employment legislation), or might otherwise have a claim for breach of contract, the parties can, in most circumstances, enter into a settlement agreement (previously called a compromise agreement) to bring the employment to an end on the terms specified in that document. Among other matters, the settlement agreement will set out and govern all sums and benefits due, or to be provided, to the employee by the employer...