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Employee x was recently fired, who subsequently took with him lists of clients and started mailing them with damaging statements about company y.

Company y spends a significant sum to get a lawyer to write a letter before action (injunction proceedings and further legal action (civil and/or criminal), which will at the very least cost another £20,000, as advised by the law firm)

Employee x responds, agreeing to all the company’s demands, but asking for a settlement agreement and 2 months’ salary (around £4000). Employee states that he will not proceed with the required undertakings unless such a settlement agreement is drafted and signed, that he has returned to his home country (with no extradition agreements to our knowledge), and has less than £1000 in his UK bank account

Do we have any realistic legal recourse in this situation, or is it likely to be more beneficial just accepting the settlement?

closed as off-topic by BlueDogRanch, Nij, A. K., feetwet Dec 4 '18 at 4:09

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You know you have legal recourse - your lawyers have advised you to budget £20,000 for it. You know the person you are targeting has no resources with which to reimburse you. You know enforcement will be problematic and likely ineffective due to the cross-national jurisdictions. Extradition is not relevant because this is s civil, not criminal matter.

You have an alternative which will cost £4,000 and which may or may not solve your problem since it relies on the questionable integrity of your ex-employee. They might take the money and stop or take the money and not stop.

You have a third option: allow them to continue and manage the fallout. You would have to assess the costs of that, both direct and reputational, yourself.

You don’t have a legal decision here: you have a commercial one.

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