Our own Barry Cullen sat down with Nitin Sharma on the latest episode of RecTalk for a full conversation on settlement agreements in recruitment.

If you’ve ever had to manage a top biller out of the business, fallen out with a business partner, or had a fee dispute drag on longer than it should, this one’s worth your time.

Watch the full episode here

What to expect from the latest episode

Settlement agreements touch more of a recruitment business than most owners realise. Barry and Nitin get into the lot…

When the exit comes back to bite you.

You agree a deal with an outgoing employee. You pay the money. Everything’s amicable. Then they come back asking for more, and legally, they can. Because without a proper settlement agreement and independent legal advice, that “very clear agreement” over email may not be worth much. Barry explains why the law works this way and how to do it properly.

When it makes commercial sense to settle.

Not every fight is worth having. Barry walks through the three big reasons to settle: your case is weaker than you think, the client relationship is worth more than the dispute, and control. Because if you both think you’ve got a 65% chance of winning, someone’s about to spend two years and a lot of money finding out who’s wrong.

Restrictive covenants get enforced more than you think.

“Not worth the paper they’re written on” is one of recruitment’s favourite myths. Barry shares real cases. One former employee paying £5,000 a month for 36 months to their old boss. Another fined £20,000 for breaching a court order, with the judge telling them they were “this close” to jail.

Taking legal advice from AI.

Barry’s now seeing opponents turn up to disputes armed with arguments their AI told them were watertight. It tells them they’re right, so they fight harder. Then a judge tells them the entire foundation of their case doesn’t exist.

The line that sums it up

 “With settlement, both sides need to be either as happy or as unhappy as each other.”

Most disputes become emotional before they become legal. The businesses that come out of them well are the ones that keep talking, keep the door open, and get the deal in writing properly.

Or, in the best advice Barry says he was ever given: agree a deal you could do on a handshake, then draft a clear, simple agreement to keep everybody honest.

Watch it

The full episode is on YouTube now: RecTalk with Barry Cullen

And if any of it sounds a bit too familiar, whether that’s an exit, a fee dispute, or a covenant that’s about to be tested, get in touch with our team.

Earlier is always cheaper.

Backdoor hires are not new. Neither is the frustration that comes with them. A candidate placed, a fee agreed and then six months later you find out the client went around you.

But here is the part most recruiters do not stop to consider.

They may have made it happen themselves.

This is not about blame.

It is about understanding the commercial logic from the other side of the table. When a client weighs up whether to cut you out of the fee, the calculation is simple.

Best case, they save the full placement fee.

Worst case, they get caught and pay what they owed anyway. No penalty. No uplift. No consequence beyond settling the original debt.

So you can see why they try it.

Now add a discount into that picture. A client pushes back on your standard 25% rate and you agree 18% to win the business. That feels like a reasonable compromise in the moment. But what you have actually done is reduce the stakes even further. If they do not pay, they are losing less than they would have before you discounted and, in a market, where fees are already being squeezed, that matters.

Discounting is not the problem. Discounting without conditions is.

Every reduced rate should come attached to clear conditions.

• Payment within agreed terms.
• Notification of the hire within a set timeframe.
• Transparency on the candidate’s starting salary.

If any of those conditions are not met, the discount falls away and the full standard rate is payable.

That single clause changes everything because, if they chance their arm, the client is no longer taking a low-risk gamble. Instead, they’re choosing between paying the discounted fee or your standard fee. The incentive structure finally works in your favour.

Discounts are for good clients and good clients play ball.

Most terms of business in recruitment do not include this. Discounts get agreed informally, written in at a flat rate with no trigger clauses and no mechanism to reinstate the full fee. So, when something goes wrong, there is no legal basis to recover anything beyond the discounted amount.

Which means the problem was never the client. It was the paperwork.

Your terms of business should reflect the deal you actually agreed. If they do not protect your margin, nothing else will. Get them right first and everything else will follow from there.

Follow Barry on LinkedIn for more legal insights on the recruitment industry.

Another fee dispute resolved. Another recruiter paid.

In this matter, recLAW successfully secured a settlement that brought a long-running debt recovery case to a close, with a total recovery of £34,000 for our client.

The latest settlement payment of £22,000 followed an earlier recovery of around £12,000, taking the total amount recovered on the matter to £34,000.

By applying the right legal pressure at the right time, recLAW secured a settlement agreement that brought the dispute to a close without the need for court action.

During the course of the case, an attempt was made by the opposition to challenge the agreed fee structure after an initial payment had already been received. recLAW successfully resisted that challenge, protecting our client’s position and ensuring the agreed arrangements remained in place.

The Result

• £34,000 recovered
• Settlement agreement secured
• Client’s position protected
• No court action required

The Takeaway

Recovering a debt is only part of the job.

Protecting your position throughout the recovery process is equally important. Challenges can arise long after liability has been established, particularly when significant sums are involved.

By taking early action and maintaining a clear legal strategy, disputes can often be resolved commercially, avoiding the time, cost and uncertainty that comes with court proceedings.

This case is a reminder that not every dispute needs to end up in court to achieve a successful outcome.

Need legal support for your recruitment business?

Explore our services to see how recLAW helps recruiters resolve disputes, recover fees, protect their interests and get paid.

For five years, recLAW has been focused on one thing, recruitment fee recovery.

And getting recruiters paid.

In an industry where delayed payments, disputed fees, and backdoor hires are all too common, we step in when it matters most and get results.

The results speak for themselves

That’s not theory. That’s money back in recruiters’ accounts.

£13,324,852 recovered in fees

3,432 disputes handled

£438,000 biggest single recovery

Behind every number is a recruitment business that refused to walk away from money they were owed.

Why Recruitment Fee Recovery Matters

Too many recruiters accept non-payment as part of the job.

It isn’t.

Unpaid invoices don’t just hurt short-term cash flow, they slow down growth, impact hiring, and reduce the overall value of your business.

The reality is, most fees are recoverable, but only if you take the right approach.

What we’ve learned from 3,000+ disputes

Across thousands of recruitment fee disputes, one thing is clear:

The difference between getting paid and writing it off often comes down to the detail (your terms, your process, and how quickly you act).

Most recruiters don’t lose because they’re wrong.

They lose because the situation isn’t handled properly early enough.

Still fighting for recruiters

Five years in, nothing’s changed about how we approach recruitment fee recovery.

We’re direct.

We’re commercial.

And we focus on outcomes.

Because at the end of the day, this isn’t about theory.

It’s about getting your invoice paid.

Got a fee you’re chasing?

If it’s dragging, it’s not fixing itself.

Now’s the time to take action.