This Practice Note explains how the damages-based agreement (DBA) regime operates for employment matters. It explains the legal context and what a DBA is. It outlines the issues with the legislation and proposals for reform. It considers what constitutes an ‘employment matter’, key terms, the requirements for an enforceable DBA, amending the DBA, specifying the ‘payment’ and fixing the payment percentage, and how costs are treated. An example calculation is given. Termination of the DBA is considered, and the SRA price transparency rules and other regulatory requirements, such as cancellation rights, risk assessments and insurance distribution activities are noted. Different rules apply to DBAs in general civil claims and in personal injury claims, and these are not considered in this Practice Note. For further guidance on these, see Practice Notes: Damages-based agreements (DBAs) and Damages-based agreements—personal injury and clinical negligence. For guidance on litigation funding in general, see Funding arrangements—overview. The legal context Traditionally, the idea that a solicitor would be financially interested in the outcome of a client's (contentious) case was seen as undesirable: the solicitor