Damages based agreements (DBAs) are to be capped at 25% for personal injury and 50% for any other claim, the government confirmed in a statutory instrument setting out how the civil litigation reforms will work when they come into force on 1 April.
As expected, DBAs are to be permitted in all civil litigation and will be capped. The cap on deductions from clients’ awards will include VAT and counsels’ fees.
In conditional fee agreements, success fees for PI will be capped at 25% of general damages and past losses.
Critics said it is still unclear how cases will be funded after 1 April. ‘These changes are along the lines of what we feared rather than expected,’ said Nigel Muers-Raby, chairman of campaign group Consumer Justice Alliance. ‘But there is still nothing on qualified one-way costs-shifting which is supposed to give clients protection.’
Meanwhile, Lord Justice Ramsey, who now has responsibility for implementing the Jackson reforms, said there will be ‘a few sweaty palms’ when, from April, lawyers will have to prepare a detailed budget setting out the entire cost of proceedings in time for case management conferences.