Grounds for invalidating a shareholder agreement

In that case the claimant pressed ahead with an unlawful deduction of wages claim despite an earlier settlement agreement purporting to settle it.

The claimant persuaded a tribunal that his employer had withheld payment prior to the settlement negotiations and that the consequent “economic inducement” to accept a sum less than his full entitlement was sufficient to amount to duress and thereby invalidated the settlement agreement.

Background An employee brought proceedings against his employers in respect of a workplace injury.

This is an interesting point that, sooner or later, will be run as a test case challenging the introduction of fees and the unreasonable delays in bringing a claim to the employment tribunal.

The insurer commenced proceedings seeking rescission of the settlement agreement (or damages for deceit in the alternative).

It alleged that it had been induced to enter into the agreement by the employee’s fraudulent misrepresentations, in the form of statements as to his condition in his pleadings and witness statements.

The County Court set aside the settlement agreement on that basis.

It held that, although the evidence indicated that the insurer did not believe the injury claims and strongly suspected exaggeration, the law only required that a party had been “influenced by” a representation in entering a contract.

Leave a Reply