Is it unreasonable to switch from a DBA to a CFA if it substantially increases recoverable costs?

This was the issue before Master James  in the Senior Court Costs Office in Dial Partners LLP & Anor v Eastern Airways International Ltd & Ors [2018] Lexis Citation 4. Master James concluded that the change from a Damages-Based Agreement  (DBA)  to a Conditional Fee Agreement (CFA) was not unreasonable and so costs were to be assessed in line with the terms of the CFA. In this case, the claimants had pursued a case under a DBA. The value of the claim was originally believed to be £2.25m but it transpired that the claim was worth significantly less than the pleaded amount. Shortly before trial the DBA was replaced with a  CFA. The case settled by the claimant accepting a Part 36 offer which had been made by the defendants before the funding arrangement was changed. Had the DBA survived, the costs burden imposed on the defendants would have been £250,000. Under the CFA, that figure was over £523,000. The defendants argued that the decision to change the funding arrangement was unreasonable.

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