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Regulatory change to make Damages Based Agreements more attractive for Civil Litigation

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Despite facing criticism from the legal profession since they were updated in the Damages-Based Agreements Regulations in 2013, forthcoming updates to Damages Based Agreements (‘DBA’) are set to make this model of funding for civil litigation claims far more attractive.

DBA’s are a type of contingency fee whereby a solicitor or barrister receives a portion (usually a percentage) of their Clients damages in the event of a legal action successfully concluding. This percentage deduction varies depending on the type of claim, and in addition law firms may also claim back disbursements they have incurred in running the case.

The updates to the DBA regulations were recently outlined by Sir Rupert Jackson, a former Lord Justice whose name became synonymous with the massive changes to the legal landscape that resulted from April 2013’s Legal Aid, Sentencing and Punishment of Offenders Act (‘LASPO’) – often referred to as the ‘Jackson reforms’. In a speech at a recent industry event, Sir Jackson admitted:

My recommendation for DBAs did not fare well because the regulations which the MoJ put in place had a huge raft of problems…many lawyers liked the idea of DBAs but when they looked at the regulations for one reason or another they said “no, this won’t work”.

The former judge highlighted the potential of hybrid DBAs, were solicitors and barristers could agree no fee or a low fee if a case lost, but would be entitled to a share of damages if the case was successful.

He added:

I’m particularly concerned that we should have hybrid DBAs…this is important as there are commercial cases which lawyers couldn’t possibly do on an entirely speculative basis but they could do on the basis of a reduced fee, if they are going to get a share of the winnings in the event of success…if the client and the lawyers both want that, if the client is a well-advised company with its own in-house lawyers…then why on earth shouldn’t they do it? Hybrid DBAs are an obvious way of promoting access to justice. I could never understand what the objection of the MoJ was to introducing them’

Funding Your Litigation Claim

If you are thinking about taking legal action against another individual or company but are confused about your funding options, Advantage Litigation Services can help. We can help you find the most cost effective solution for your circumstances. Click here to contact us today or call 0800 160 1298 to see how we can help you

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