Damages-based agreements—all claim types
Damages-based agreements—all claim types

The following Practice Compliance practice note provides comprehensive and up to date legal information covering:

  • Damages-based agreements—all claim types
  • Key terms
  • What is a damages-based agreement?
  • DBAs and the indemnity principle
  • Enforceability
  • Pre-conditions to having an enforceable DBA
  • Amending the DBA
  • Calculating the percentage payment
  • Personal injury example
  • Employment example
  • More...

This Practice Note explains how the damages-based agreement (DBA) regime operates, including:

  1. how DBAs operate

  2. the impact of the indemnity principle on recovering costs from the client's opponent

  3. enforceability issues

  4. how to calculate the payment due under a DBA

  5. whether you need a risk assessment

The regime is the product of ss 45–48 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO 2012), which amend s 58 of the Courts and Legal Services Act 1990 (CLSA 1990), together with:

  1. Damages-Based Agreements Regulations 2013, SI 2013/609

  2. Recovery of Costs Insurance Premiums in Clinical Negligence Proceedings (No 2) Regulations 2013, SI 2013/739

  3. Financial Guidance and Claims Act 2018

  4. relevant SRA requirements

Historically, DBAs have only been permitted for employment matters. DBAs can now be used for all types of civil and commercial litigation.

Key terms

Base coststhe amount you charge for the work you do (excluding disbursements and VAT), calculated as (1) number of hours spent on the client's matter x (2) hourly rate
CFAconditional fee agreement
CLSA 1990Courts and Legal Services Act 1990
CRUCompensation Recovery Unit
Costs insurance premiumcost of purchasing insurance to indemnify the client against the risk of having to pay their own costs (usually disbursements only) and their opponent's costs
DBAdamages-based agreement
Disbursementsexpenses incurred in conducting the client's matter, eg court fees, travel expenses, expert fees
Paymentthe percentage amount you take

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