DBAs

Solicitors advising on damages-based agreements should make detailed notes at the time agreement is made in case they are later accused of exploiting the client, one of the leading barristers in solicitors’ regulation has advised.

Continuing concern over the potential for mis-selling damages-based agreements has led the Legal Services Board to order the Legal Ombudsman to monitor the complaints it receives in relation to them.

It is “easy” to imagine a world where legal expenses insurance becomes mandatory in the same way that car insurance is, the Chief Legal Ombudsman claimed today. Adam Sampson said they would also be keeping a close eye on how DBAs develop.

The government yesterday pressed ahead with plans to allow consumers and businesses to bring opt-out collective actions for breaches of competition law – but indicated that they are not yet a done deal.

The Legal Services Board has decided against introducing guidance on how regulators should mitigate the risk of damages-based agreements being mis-sold after the regulators said they will tackle it through their regulatory frameworks.

The £2m limit above which commercial cases are not subject to automatic costs management is being reviewed, the judge in charge of Jackson implementation has revealed, while also hinting that pre-issue costs may come within costs management in future.

The government is already planning changes to the rules governing damages-based agreements (DBAs), it has emerged. The news comes as a leading litigation funder argues that concerns over whether the existing rules permit hybrid DBAs are misplaced.

Solicitors need to be careful to ward against professional negligence claims for mis-selling damages-based agreements (DBAs) or under-settling cases run under them, a QC has warned. Solicitors need to ensure that a full explanation of the reasons for the funding is given.