We advised an academy trust on the terms of a settlement agreement with a Headteacher. The academy trust had previously instructed a local firm of solicitors who were not experts in the education sector and so were unfamiliar with the restrictions and considerations relating to special severance payments and the Academy Trust Handbook. We advised the academy trust on the risks of proceeding with the draft agreement which breached the provisions of the Handbook and which was likely to lead to sanctions from the ESFA. We advised the academy that if it was unable to show that it had treated the severance payment correctly, the ESFA may seek to claw back the payment. Following our advice, we successfully re-negotiated the settlement agreement in compliance with the strict requirements of the Handbook and extinguished the client’s liability.