Damages-based agreements (DBAs)

The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:

  • Damages-based agreements (DBAs)
  • What is a DBA?
  • Legislative background to DBAs
  • DBA regulations 2013
  • DBAs in employment and personal injury matters
  • Proposed reform of the DBA regulations—2015 onwards
  • 2015 Working Committee review
  • 2017 initial assessment of the post-implementation review of Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO 2012)
  • 2019 assessment of the post-implementation review of Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO 2012)
  • Proposed DBA Regulations 2019
  • More...

Damages-based agreements (DBAs)

What is a DBA?

A damages based agreement (DBA), sometimes referred to using the umbrella term 'contingency fee agreement', is a means of funding litigation whereby a client agrees to meet their representative’s fees on the basis that they are successful in the litigation and where those fees are linked (in quantitative terms) to the amount of damages or debt recovered. They usually take the form of a 'no win, no fee' agreement. As such, a DBA provides that the representative's fees will only be payable in the event that a specified contingency occurs which confers a financial benefit (generally speaking, damages) onto the client. The fee that is to cover the representative's costs is a percentage of the financial benefit (the DBA payment). In addition, inter partes costs are recoverable on an hourly basis even though a DBA is in place. This is known as the 'Ontario model'.

Legislative background to DBAs

Retainers under which a lawyer is entitled to a share in the client’s recoveries were historically prohibited at common law on grounds that they were champertous.

Prior to 2013, it was unlawful to enter into a DBA for contentious work (except in employment claims). The legalisation of DBAs in contentious business was one of the recommendations made by Sir Rupert Jackson as part of his Review of Civil Litigation Costs: Final Report (December 2009).

DBAs

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