The government will look again at the regulations for damages-based agreements – but has ruled out any provision for hybrid arrangements.
The Ministry of Justice today asked the Civil Justice Council to take a detailed look at technical revisions to DBAs.
The funding arrangements have been permitted since April 2013 as part of the Jackson reforms, but most lawyers have been reluctant to offer them to clients.
Many experts – including Lord Justice Jackson (pictured) – have advocated a hybrid model to enable lawyers to offer a ‘no win, low fee’ arrangement.
But the government has ruled out allowing additional forms of funding litigation coupled with a DBA because such arrangements ‘could encourage litigation behaviour based on a low-risk/high-returns approach’.
Lord Dyson, master of the rolls and chairman of the CJC, today said he was ‘disappointed’ with the decision but insisted the council will review the regulations in the areas suggested by the government.
The CJC working group, chaired by Professor Rachael Mulheron of Queen Mary University London, will look at dividing into two sets existing regulations with employment tribunal regulations.
It is also commissioned to look at changing the regulations so defendants will be able to use DBAs, by widening the rules on parties receiving a specified financial benefit.
The review will clarify that the lawyer’s payment can only come from damages and the payment should be a percentage of the sum ultimately received. It will also look again at whether the regulations should contain provisions on terminating the DBA.
Earlier this month, Jackson urged the government not to be put off hybrid DBAs by ‘powerful vested interests’.