DBAs

The government needs to be sure that allowing hybrid damages-based agreements will not encourage abuse by lawyers, such as speculative litigation, the lead civil servant has warned.

Changes to the damages-based agreement (DBA) regulations, including opening them up to defendants and allowing hybrid DBAs, have been put forward by an independent review.

The Association of Personal Injury Lawyers has called for qualified one-way costs shifting to be extended beyond personal injury and the cap on damages-based agreements to be doubled to 50% for fast-track cases with fixed costs.

Sir Rupert Jackson last week told justice minister Lucy Frazer that the government was wrong to tread with caution over reforming the regime for damages-based agreements (DBAs). He said there was “no possible reason” why hybrid DBAs were not allowed when hybrid conditional fee agreements were.

Claimants did not act unreasonably in switching funding from a damages-based agreement to a conditional fee agreement shortly before trial, even though the defendants are now facing a much larger bill, a costs judge has ruled.

City law firm Humphries Kerstetter has secured third-party funding to launch of a new wave of claims against MasterCard and Visa on behalf of a host of companies. The move follows the firm’s recent negotiation of a series of settlements with the card schemes on behalf of Tesco and WH Smith.

London law firm Harcus Sinclair – acting under a damages-based agreement and supported by Slater & Gordon – has secured third-party litigation funding to start the first group litigation arising from the Volkswagen emissions scandal.

A small City law firm that took on a major case on a damages-based agreement is set to receive one of the largest pay-outs yet under this still novel form of funding after the High Court awarded its client nearly £9m in damages and interest.

The Civil Justice Council working party on damages-based agreements has fallen short of calling for hybrid agreements to be allowed, but told the government that if it wants to ban their use, “then it owes it to the legal marketplace to make that entirely plain”. But it did recommend that recoverable costs should be excluded from DBA caps.

Lord Dyson, the Master of the Rolls, has expressed his disappointment after the Ministry of Justice announced that it had “ruled out” the introduction of hybrid damages-based agreements.