Martin Partington: Spotlight on the Justice System

Keeping the English Legal System under review

Damages based agreements: proposals for reform

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One of the most innovative recommendations from Sir Rupert Jackson’s proposals for the reform of costs of civil litigation was that a new regime of ‘damages based agreements’ (DBAs) should be introduced. Known as Contingency Fees Agreements in other jurisdictions, they – in theory – enable a law firm to take on a case, on the basis that if the case is won, the firm can take a percentage of the damages awarded to cover the costs and fees of bringing the action. The intention was that DBAs would be an alternative to Conditional Fee Arrangements – which have been around for some years now.
Although introduced in 2013, they have not taken off as had been hoped. DBAs were subject to special regulations – the Damages-Based Agreements Regulations 2013, SI 2013/609. These regulations have had a chilling effect which has deterred litigators from using them as Jackson had intended.
The Ministry of Justice has drafted proposals for amending the regulations. It was also agreed that the Civil Justice Council should take a specialist look both at the draft revised regs and wider policy issues.
Its report on both these matters was published at the beginning of September 2015.
It seems likely that a version of the revised draft regulations will be brought into effect later in 2015, which should clear up some of the issues which have worried litigators.
But the wider policy issues seem unlikely to be addressed in the short term. The likely impact on civil litigation practice is thus currently very hard to determine.

For the CJC report see https://www.judiciary.gov.uk/announcements/damages-based-agreements-dbas-publication-of-cjc-recommendations/
For a professional commentary on the report see http://blogs.lexisnexis.co.uk/dr/revisions-to-damages-based-agreements-for-civil-litigators/

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Written by lwtmp

September 29, 2015 at 2:57 pm

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