Barden, Michael Kieran -v- Commodities Research Unit International (Holdings) Limited, CRU Strategies Limited, CRU International Limited and CRU Publishing Limited - Chancery Division - [2013] EWHC 1633 (Ch)

A settlement in writing at a mediation required an employer to pay an employee the amount of £1.35 million. No mention was made in the agreement of income tax or who was to pay it.

The employer paid £676,822.84 to the employee and £673,177.16 to HMRC as income tax. The employee did not succeed in persuading the court that he should have received £1.35 million (and that the employer should pay a further similar additional amount to HMRC).

If the settlement agreement had included wording as to the tax position the litigation would have been avoided (assuming that the draft settlement would have survived inter-party discussion about that issue).