ECH21127 - Penalties: How to Conduct the Settlement Meeting
It is important to remember that a contract settlement is
just that: a legally binding contract governed by the same law as
say buying or selling a house.
To create a valid, enforceable contract all parties must be
fully aware of all the relevant facts, understand the process, and
enter into it willingly.
A penalty settlement meeting should be conducted along the
following lines. The manager or experienced caseworker will
- briefly recap the history of the case and the irregularities found
- confirm the agreed figures of liability and interest
- identify the culpable tax, NICs and so on
- state the maximum penalty
- remind the employer or contractor of the details of the Board's practice, as set out in factsheet EC/FS4
- indicate the level of penalty which is considered appropriate by reference to the Board's guidance
- ask whether there are any mitigating factors which have not already been mentioned
- be prepared to listen and consider revision of the penalty loading
- invite the employer or contractor to make an offer
- where necessary suggest the 'expected' figure
- be firm in their opinion of the 'expected offer'
- need convincing argument to change that view and
- remember the offer must not be dictated to the employer or contractor
- help with wording a suitable letter by providing a draft.
Where the offer cannot be accepted locally ( ECH21550), you should
- explain that any offer will be submitted to the Authorising Officer for consideration on behalf of the Board
- explain acceptance or otherwise rests with the Authorising Officer and
- avoid any indication that the Authorising Officer
- is committed to a particular figure or
- any offer will be 'recommended' for acceptance.
Failure to cover all of the points could lead to an allegation of unfair treatment under the Human Rights Act 1998.
