Damages-based agreements need urgent review

The Civil Justice Council (CJC) has put forward 45 recommendations to simplify and encourage the use of damages-based agreements (DBAs) by lawyers and their clients.

The DBA funding method has been used cautiously by lawyers after they were introduced under the Jackson reforms in 2013.

The new recommendations, made in the CJC working party report and chaired by professor Rachael Mulheron, include:

• Making technical amendments to the existing regulations to make them clearer and more attractive as a funding option;

• Increasing the caps on payments for cases; and

• Agreeing a 'trigger point' when a DBA becomes payable, and circumstances under which it can be terminated.

Commenting on the proposals, professor Mulheron said: 'DBAs have been used very sparingly by the legal profession since the Jackson reforms took effect in 2013. This has been unfortunate, given that the use of DBAs in contentious litigation was, arguably, the most novel aspect of those 2013 reforms.

'The working group was commissioned to explore the uncertainties which surround the current regulations, and to make recommendations to reduce or to eliminate uncertainties. The group canvassed 20 drafting issues, and 10 policy issues, which it considered would be relevant in the operation of DBAs. 'The CJC hopes that the work undertaken in this report will help to inform, in a useful and constructive way, the redrafting of the DBA regulations, to render DBAs a useful funding option in suitable cases. I am grateful for the hard work and support of all the members.'

The Master of the Rolls, Lord Dyson, pictured, welcomed the report and urged the government to consider modifying the regulations to promote confidence in the funding arrangements for those involved in a personal injury claim or commercial disputes.

'DBAs were envisaged by Lord Justice Jackson in his report "Review of Civil Litigation Costs" as an important funding option available to those wishing to pursue or defend a claim. They have, however, been used infrequently since then by lawyers and their clients as a method of funding litigation. I hope that the changes recommended in this report will encourage the greater use of DBAs,' he added.