Alex Line successful in EAT appeal concerning COT3 compromise agreement

In Darlington v Islington LBC [2026] EAT 11, the EAT (Lord Fairley P.) dismissed an appeal concerning the interpretation and effect of a COT3 settlement agreement. Alex represented the successful Respondent.

The Claimant had been employed at a mainstream school, during which time she was employed by the local authority. Whilst working at the school she made disclosures which she alleged to be protected disclosures. Having left her employment, she applied for another job in an Early Years Centre run by the same local authority. A provisional offer of employment was withdrawn following receipt of a reference from the school she had previously worked at. A settlement was reached (prior to any claim being presented) via a COT3, leading to agreed terms of reference. She then applied for the same role again, using the new reference, but was unsuccessful.

She brought a claim for whistleblowing detriment in the Employment Tribunal. At a preliminary hearing a judge ruled that the Tribunal had no jurisdiction because the terms of the COT3 precluded her claim. The COT3 stipulated that it was “in full and final settlement of all and any claims which the Employee has or may have in the future against the School, the Employer or any of its governors, officers or employees whether arising from the employment with the Employer, its termination or from events occurring after this agreement has been entered including, but not limited to, claims under … the Employments Rights Act 1996”.

The Claimant appealed this decision, contending (amongst other things) that the Tribunal had taken a literal rather than objective approach to the interpretation of the COT3. The EAT disagreed, concluding that the Tribunal had not erred in its approach and that, objectively construed, it had been the intention of the parties to settle all existing and future claims against the local authority based on the allegation that the Claimant had made a protected disclosure and had been subject to detriment because of this. The EAT drew upon the cases of Arvunescu v Quick Release (Automotive) Ltd [2023] ICR 271 and Ajaz v Homerton University Hospital NHS Trust [2023] EAT 142 in support of its decision.

Lord Fairley’s judgment can be read here.

This is another case (following the recent decision in Turner v Western Mortgage Services Ltd [2025] EAT 91) which illustrates the care required when drawing up settlement agreements, and the risk that even potentially quite wide wording will be liable to upheld by tribunals as precluding future claims.

Find out more

Alex Line specialises in the areas of employment and education law. He has extensive employment and discrimination law experience, having practised in these areas throughout his career at the Bar. Alex has significant experience of representing both employers and employees relating to a broad range of sectors in Employment Tribunal proceedings, ranging from providing strategic advice, attending preliminary hearings, through to undertaking complex multi-week trials. He has experience of appearing before the Employment Appeal Tribunal and the Court of Appeal in employment cases. His other main area of practice is education law; therefore he has a particularly strong understanding of the schools and higher education sectors. He also regularly acts in cases involving the public sector.

To find out more about Alex, contact Nick Levett on +44 (0)20 7427 4908 or Mark Gardner on +44 (0)20 7427 4909 for a confidential discussion.

News 6 Feb, 2026