Few barristers are prepared to risk entering into a damages-based agreement even if the case is deserving, the Bar Council has said, criticising the government for not tackling what has been described as an 'unacceptable state of affairs'.
The Ministry of Justice, which is reviewing civil litigation funding reforms under part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO), was told by the bar's representative body that DBAs have not taken off in personal injury and medical negligence work.
The funding arrangement became lawful in 2013 following Lord Justice Jackson's review of civil litigation. Its object was to provide an option for litigants who otherwise could not afford to make their claim.
In its response to the ministry's call for evidence on whether or not part 2 of LASPO is working, the Bar Council notes that DBAs are widely used in employment cases, particularly by solicitors. However, barristers' experience of DBAs in employment matters is 'varied'. In cases where there are very limited inter partes costs orders, there is no risk of the DBA being challenged by the paying party, as there is in non-employment matters, says the bar. The threat of legal challenge to the lawfulness or enforceability of DBAs imposes a restriction on most barristers otherwise willing to pursue claims under a DBA.
The bar Council adds: 'General uncertainty over the drafting of a DBA agreement under the Damages Based Agreement Regulations 2013 led the Bar Council to advise members that particular care had to be taken in drafting an agreement. As the impact of a finding of unenforceability is so dramatic (no costs at all are recoverable by the barrister) very few barristers are prepared to risk entering into a DBA even if the case is deserving.'
The bar has been calling for reform here since DBA regulations were first announced: 'It is very disappointing that still no reform has come about. The message from the Bar Council, supported by the senior judiciary, in calling for reform has gone unanswered. Now is the time for the government to act and bring about speedy reform to this area.'
Earlier this month the Civil Justice Council renewed its call for action on DBAs, saying that little progress had been made since the judge-led body guiding civil justice policy made 45 recommendations in September 2015 on how to fix the impasse.
The Bar Council suggests that the regulations should make clear that inter partes costs can be recovered during the course of an action even if the claim subsequently fails - mirroring the operation of conditional fee agreements. Some payment for work done should be allowed if the client terminates a DBA.