Government rules out hybrid DBAs from CJC review

Government rules out hybrid DBAs from CJC review

Despite Lord Jackson arguing heavily in favour of hybrid DBAs, practitioners will be disappointed that the Government has ruled out consideration of hybrid arrangements from the Civil Justice Council's look at proposed technical revisions to the DBA regulations.The issue of hybrid DBAs has been constantly put forward since the introduction of the DBA regulations, but on the basis that the Government considers such arrangements could encourage litigation behaviour based on a low risk/high returns approach, consideration has not been included.

Lord Dyson, Master of the Rolls and Chairman of the CJC, said:

“While I am disappointed that the Government has decided not to permit hybrid DBAs, the CJC will – as ever – seek to assist and review the regulations in the areas suggested, and in the light of experience."

The CJC working group is to be chaired by Professor Rachael Mulheron, who was involved in drafting the DBA regulations themselves. The group has been asked to consider the following issues in detail:

  • whether to have two sets of DBA regulations, one dealing with civil litigation proceedings (where DBAs are relatively new) and one dealing with employment tribunal regulations (the employment tribunal had DBAs prior to them being introduced for civil litigation and contain different provisions)
  • providing clarification as to what forms of litigation funding may not be used when a DBA is being used to fund litigation
  • whether defendants should be able to use DBAs, they are currently not able to. The application of the regulations would need to be widen to where the party receives a specified financial benefit (rather than restricting them to receiving a payment)
  • providing clarification that the payment to the lawyer may only come from any damages paid and that such payment is to be a percentage of the sum ultimately received. This has been an issue on which there has been some debate.
  • whether provisions for the termination of a DBA should be included within the regulations. This is area which has caused some difficulty.

Information on the work to be undertaken is available on the judiciary website here

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