What is a Deed of Settlement (2020 Update)?
Looking for an alternative to litigation? Find out how a deed of settlement can provide a negotiated resolution to your legal dispute here.
Do you have a legal dispute and want to avoid the extensive stress and costs involved with going to Court? Have you come to an agreement with the other party and want to make it legally binding? A deed of settlement could be an effective option.
What Is It?
A deed of settlement is a legal document which formalises an agreement between relevant parties to settle a dispute. It is an alternative to litigation, and has legally binding terms the parties have agreed upon. These agreements also usually prevent the parties from commencing further litigation, as the settlement is deemed to be final.
An example of this could be an employment dispute between an employer and employee. Rather than spending large amounts of money and time on legal proceedings, negotiations can be entered into. During these negotiations, each party can have an opportunity to voice their issues and interest. This allows the parties to negotiate possible solutions and mutually agreed upon terms rather than deal with a more adversarial situation in Court.
Why Do You Need a Deed of Settlement?
Executing a deed of settlement can be a very effective way of resolving and finalising a legal dispute. Unlike Court proceedings, due to negotiations of the parties, both parties can have their interests met and finalise the matter in a ‘win-win’ manner.
A number of other reasons you may wish to execute a deed of settlement include:
- As the settlement allows parties to avoid court, this allows parties to avoid the stress and costs involved in litigation.
- As most deeds of settlement include terms of confidentiality, this allows parties to settle their dispute without attracting publicity, and to keep their legal issue and agreement private.
- Deeds of settlement are a very flexible way of resolving disputes. Due to the parties having the freedom to agree to settle for what they wish, they can have their individual interests and needs met. Most of the time this even includes satisfaction of both parties and a resolution without an admission of guilt.
Negotiating is a good option and can sometimes be Court-ordered before a trial can occur. However, both parties will need to make concessions, and might not receive what terms they initially sought. However, the benefit of this is that you’ll avoid the high costs and time involved in litigation. It’s also important to remember that even where you win your case, you won’t receive 100% of your costs back.
Important Provisions of a Deed of Settlement
A deed of settlement usually includes the following:
- A list of the parties to the dispute and settlement
- Recitals (which provides background to the dispute and the relationship of the parties)
- Terms of Settlement – chiefly what the terms of the actual agreement.
- An execution page which includes the names and signatures of all parties to the deed of settlement and the names and signatures of the witnessing JP or solicitor.
Limitations of a Deed of Settlement
A deed cannot bind anyone other than a party to the deed. On top of that, a deed between two parties cannot serve to impede the work of statutory agencies. Also, a deed has no effect if it is against public policy, contrary to law or if its purpose is to conceal unlawful activity.
Keep in mind that there are other alternatives to court litigation to resolve your dispute. If you fail to form a deed of settlement, consider arbitration or mediation to resolve your legal disputes. Furthermore, to protect your and your business’s interests, make sure you get in contact with a disputes resolution lawyer for relevant legal advice.
Mikail is a Paralegal working in our content team, which aims to provide free legal guides to facilitate public access to legal resources. With a passion for increasing access to justice and how technology can enhance this, his research explores how the law is adapting to emerging technologies and how this affects consumers and businesses alike.