ACAS COT3 Settlement vs Employment Tribunal Judgment
Comparing settlement via an ACAS COT3 agreement (which bars future claims) with proceeding to an Employment Tribunal judgment (a public, judicially determined finding enforceable as a court order).
Overview
In employment disputes subject to ACAS early conciliation, parties have two main outcomes: they can reach a COT3 settlement brokered by an ACAS conciliator, or they can proceed to a full Employment Tribunal hearing and receive a judgment. Both routes end the immediate dispute, but they differ fundamentally in their nature, enforceability, and implications for future claims. A COT3 is a settlement agreement concluded with the assistance of an ACAS conciliator under the Employment Tribunals Act 1996 s.18. Once signed, a COT3 creates a statutory bar on any further claims in relation to the matters settled — parties cannot return to the Tribunal in relation to those issues. A Tribunal judgment, by contrast, is a public determination by a panel of three (or, in some cases, an Employment Judge sitting alone) and is enforceable as a county court judgment if unpaid.
Side-by-Side Comparison
ACAS COT3 Settlement
Pros
- No requirement for independent legal advice — simpler and cheaper than a settlement agreement for employees
- Provides certainty — both parties know the dispute is closed; employer can be confident of no future claims on the settled issues
- ACAS conciliation is free and confidential — the conciliator is neutral and experienced in employment matters
- Flexible — parties can agree terms not available from the Tribunal (e.g. agreed references, non-disclosure, phased payments)
Cons
- Settlement terms are confidential — there is no public finding of wrongdoing, which may be important to some employees
- Employees may accept less than the Tribunal would award if they underestimate their claim's value without legal advice
- Once the COT3 is signed, the statutory bar applies — no ability to reopen the claim if further facts emerge
- Some terms (e.g. non-disparagement clauses) may restrict what the employee can say publicly about the employer
Best For
Cases where both parties want a swift, confidential resolution; where the employment relationship has ended and the parties simply want finality; and where non-monetary terms (references, non-disclosure) are important.
Employment Tribunal Judgment
Pros
- Public determination — provides an official finding of unfair dismissal, discrimination, or other wrongdoing
- Enforceable as a county court judgment — bailiffs, attachment of earnings, and charging orders available if unpaid
- Tribunal can award remedies not available by agreement — e.g. reinstatement, re-engagement, ACAS uplift for failure to follow Code of Practice
- No upper limit on discrimination compensation (unlike unfair dismissal, capped at the lesser of one year's pay or £115,115 from April 2025)
Cons
- Time and cost — a fully contested Tribunal hearing may take 1–2 years from claim to judgment; legal costs add up even though the Tribunal has a no-costs general rule
- Public — the judgment is published and searchable; employers may not want a public finding against them
- Risk — employment outcomes are uncertain; the employee may recover nothing if the claim fails
- No compensation for stress, inconvenience, or legal costs (save in exceptional cases of unreasonable conduct under ET Rules r.76)
Best For
Cases where the employee wants public vindication, where the claim value is high (especially discrimination), where reinstatement or re-engagement is sought, or where the employer refuses to negotiate seriously.
Key Differences
Our Recommendation
For most employees, a well-negotiated COT3 providing fair compensation and a satisfactory reference is a better outcome than a contested Tribunal hearing — the costs, delay, and stress of litigation are significant and there is always a risk of losing. However, where the claim is high-value (especially discrimination), where the employee wants public vindication, or where the employer's behaviour was particularly serious, pursuing a Tribunal judgment may be the right choice. Always take legal advice on quantum before settling via COT3 — employees frequently undervalue their claims.