The Civil Justice Council (CJC) today set out a blueprint of 45 recommendations designed to kick-start the use of damages-based agreements.
The funding method, which calculates the lawyer’s fee as a percentage of the financial benefit received from a successful case, was a cornerstone of the Jackson reforms introduced in April 2013.
But few lawyers have opted to use DBAs, prompting the CJC to convene a set of experts from across the sector to suggest changes.
- Technical amendments to existing regulations to make them clearer and therefore more attractive;
- Increasing some of the caps on payments for cases;
- Allowing lawyers and clients to agree a ‘trigger point’ at which a DBA becomes payable and the circumstances under which it can be terminated.
Master of the rolls Lord Dyson (pictured) said he hopes the changes recommended will encourage greater use of DBAs.
‘I now urge [the government] to consider further modifications to the regulations to help promote confidence in them as one of the funding arrangements available to those involved in a personal injury or commercial dispute,’ he added in a statement.
The Ministry of Justice requested the formation of a working group to look into the issue last December. The group, chaired by Professor Rachael Mulheron and with representatives from across the profession, met six times in the subsequent months.
The CJC took the view that some aspects of DBA policy which have been adopted or endorsed by the last government have created 'sufficient disquiet or opposition' in the legal profession to warrant further consideration.
The report said the two sums liable for payment under a DBA, the representative's payment and expenses incurred by the representative, were seen as 'eating away' at the contingency fee earned by the solicitor.
The working group found that a list of 'expenses' falling outside the DBA cap was not necessary, but the term 'expenses' should be deleted from regulation and replaced with 'disbursements'. It was also agreed that where VAT is recoverable, it should be excluded from the cap.