Damages Based Agreements, or DBAs, are a type of “no win, no fee” arrangement between a solicitor and client. DBAs are now permitted for commercial disputes in England since April 2013.
Under a DBA, the client agrees to pay the solicitor a percentage of the sums recovered from the losing party in a claim. The solicitor is therefore rewarded based on achieving success in the case. This is in contrast to Conditional Fee Arrangements, or CFAs, where the solicitor would calculate and charge for work carried out on an hourly basis.
If the client is unsuccessful, their solicitor will not be paid for the work carried out under the DBA. It is important to note that the client will still be potentially liable for any adverse costs, but these are mostly covered by an after the event (ATE) insurance policy.
In claims or proceedings at first instance, a DBA must not provide for a payment (including VAT) to the solicitor that is more than either of the following:
- 25% of the relevant “sums recovered” by the client in personal injury cases; and
- 50% of the “sums ultimately recovered” by the client in all other civil litigation.
What are the advantages of a DBA to the client?
- Greater certainty as to how much you will pay your solicitor;
- The client does not have to make regular or unexpected payments to his solicitor, which helps with cash flow implications of funding litigation; and
- Mitigation of potential liability for their opponents’ costs (with the appropriate ATE insurance policy in place);
At Bloomsbury Law, we are able to consider entering into DBAs with our clients on cases within our areas of expertise where the claim is of high value (normally at least £500,000.00). It is important for us to also identify specific risk factors in your case in order to assess your prospects of success. We list below some of the factors we consider when deciding to take on a case on a DBA basis;
- The facts of your case and the people who are likely to give evidence on your behalf;
- The legal basis for the claim against your opponent, or the legal basis for your defence;
- Your chances of succeeding;
- The strength of any claims made or threatened against you by the other party;
- The level of damages/losses that you can expect to recover from your opponent; and
- The ability of your opponent to pay you
We believe our approach to litigation funding sets us apart from other solicitors, and we are determined to remain at the forefront in this area by assisting you where possible. If you believe you have a strong claim and are interested in funding your claim through a DBA with Bloomsbury Law, please get in contact with Jamil Ahmud or Nisha Chopra on 0207 998 7777.