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Damages-Based Agreements - Options for funding litigation

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In April 2013, the Government brought in reforms to civil litigation funding and costs in England and Wales. These reforms concerned the way that civil cases are funded, and the costs involved in bringing those cases.

Damage-based Agreements (DBAs) are now permitted to increase the choice of funding options, to balance out other changes such as the end of success fee recoverability from the opposing party, and to help achieve access to justice for claimants.

The maximum payment that a lawyer can recover from the claimant's damages under a DBA is capped at 25% of damages (excluding damages for future care and loss) in personal injury cases; at 35% of damages for employment tribunal cases (which has existed since 2010); and at 50% of damages in all other cases.

On 10 November 2014 the Civil Justice Council announced that the Government has ruled out hybrid damages-based agreements. The Hybrid DBA was to allow ‘no win, low fee’ contingency agreements instead of an ‘all-or-nothing’ approach. According to the council, the hybrid option has been ruled out because the government ‘considers such arrangements could encourage litigation behaviour based on a low-risk/high-returns approach.’

If you would like to know more about DBA’s or other forms of litigation funding then please contact Clarion’s head of litigation, Simon Young, on 0113 222 3206 or at simon.young@clarionsolicitors.com.

 

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