Employment Appeal Tribunal Dismisses Claimant’s Challenge Over Settlement Pressure
The Employment Appeal Tribunal has dismissed an appeal from a claimant who unsuccessfully argued that she was forced into a settlement under economic duress.
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Background to the Dispute
Ms Zhuming Xu, a former finance officer at Christian Action Research and Education (CARE), brought claims of age and race discrimination against her former employer and several individuals. During the proceedings, Ms Xu was represented by ELS Solicitors under a conditional fee agreement. On the third day of the final hearing in March 2019, Ms Xu settled her claims for £12,000 following advice from her legal team.
Following the settlement, Ms Xu sought to revoke the tribunal’s dismissal of her claims and applied for a wasted costs order against ELS. She argued that she had been subjected to improper pressure, alleging that her solicitors told her she would be liable for £41,000 in costs if she rejected the settlement offer and the case proceeded.
Tribunal Findings on Economic Duress
The original Employment Tribunal rejected Ms Xu's applications. It found that the solicitors had acted properly in their advice, noting that the claimant was faced with a stark reality regarding the risks of litigation. The tribunal concluded that there was no evidence of economic duress and that the claimant had made a genuine choice to settle rather than risk further costs.
The Appeal Decision
Ms Xu subsequently appealed to the Employment Appeal Tribunal. The appeal focused on the interpretation of the conditional fee agreement, specifically whether ELS would have been entitled to the claimed £41,000 costs upon termination of the retainer. The appellant argued that the firm would only have been entitled to £25,000.
His Honour Judge Shanks dismissed the appeal on two primary grounds. Firstly, he noted that the interpretation of the fee agreement was a new point that had not been raised before the original tribunal. Consequently, it could not be introduced at the appeal stage. Secondly, the judge was satisfied that even if the point had been argued, it would not have altered the tribunal’s finding that no economic duress had occurred.
In his closing remarks, the judge expressed sympathy for the difficulties faced by the claimant but clarified that her allegations against her former legal representatives remained baseless. The dismissal of the appeal marks the end of these specific proceedings.
Read the entire judgment here: Ms Z Xu v CARE and Others [2026] EAT 98
