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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 50161
Experience:  Qualified Solicitor
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I left my former employer through a compromise agreement.

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I left my former employer through a compromise agreement in October last year. A month later they started demanding that I pay an excess mileage charge on my former lease car. I had returned the lease car almost two and a half years earlier. I had understood that the agreement ended all claims between us. I sought info from them and they failed to answer my questions. I wrote back and heard nothing for several months until a debt recovery letter arrived. I wrote again to know what was happening. They sent a letter claiming it included lease agreements etc as part of a pre-action letter and also contacts for sources of legal advice, except none of this was included. Now they have started legal action. Can they do this despite the compromise agreement?
Ben Jones :

Hello, my name is ***** ***** it is my pleasure to assist you with your question today. What claims did the agreement actually compromise - was there a specific mention of any claims they could make against you?


Hello Ben, there was no mention of any claims the Council could make. Under a heading "Full and final settlement of claims" in the following paragraph and then a long list of restrictions upon me.


Sorry, was trying to paste this ...

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Ben Jones :

Were there any warranties made by you in the agreement? This would be for example promises you have made about your situation or that you do not know of any existing claims that the employer may make against you? Also do you agree that the mileage is something you owe?


The warranties all refer to any actions I have taken or may take. They appeared fairly standard to me: I have not instituted any proceedings against my employer or its employees, I have not committed any action or omission that would constitute repudiatory breach, not withheld or failed to disclose anything material, all information and property returned or not retained, not aware of any matters that would affect entering into the agreement, not aware of any grounds that might give rise to PI claim and that no claim is pending. No other warranties.


I did have the lease car and there was some excess mileage but, as I explained previously this was over two years old at the time I left employment and my employer only informed after completing the agreement, which feels a bit sharp.


I believe the lease scheme only made provision for recovery of excess payments through payroll. I am no longer on the payroll.

Ben Jones :

Thank you. You are correct that the settlement agreement is used as a tool to put an end to any potential claims which could arise as a result of your employment and which you or the employer may have against each other. There are a few exceptions, such as you can still make claims for pensions and personal injury and the employer will also be able to make a claim against you if you had breached any of the warranties given by you in the agreement.

Assuming that no warranties were breached then the employer should not be allowed to make a claim against you for the money they say you now owe – this should have been considered as part of the agreement and appropriate provisions made in relation to the settlement sum that was agreed.

Saying that, there is nothing stopping them from actually trying to pursue this now and even making a claim against you. That means you will have to defend it and explain to the court why they cannot actually proceed with it and hopefully it will just be struck out. But the key is they can still attempt and claim this, although whether they succeed is an entirely separate matter. It is of course inconvenient that you my have to get engaged with responding to a potential claim and showing a court why they should not be allowed to claim but it is something that must be done if it comes to it – you do not want to just ignore this if a claim is made as the court could make a judgment in their favour due to your non-response.

In the meantime you can try and continue to correspond with the other party to advise them why they should not be proceeding with this, but they do not have to listen to this or engage with you and it may eventually come down to a court making the final decision.

Hope this clarifies your position? If you could please let me know that would be great, thank you

Customer: Thanks. Confirms the view I had. Interestingly I have now obtained a copy of the original lease car agreement that I signed which only provides for the recovery of excess mileage through the payroll mechanism. Since they chose to take me off the payroll by making me redundant I would have thought that another reason why they can't recover. It's not as if they asked me while I was still employed and I defaulted.
Ben Jones :

yes, I agree to an extent but legally they could still potentially try and recover this through the courts if it remains outstanding after your employment terminates but then we go back to the possibility of this actually happening in the current circumstances and knowing there was a settlement agreement in force

Ben Jones :

Please let me know if this has answered your original question or if you need me to clarify anything else for you in relation to this? Thanks

Customer: Thanks. I think you've answered the question. Best regards.
Ben Jones :

you are most welcome, all the best

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