Civil Justice Council News Release
10 November 2014
CJC to look at Damages Based Agreements revisions
The Government has asked the Civil Justice Council (CJC) to take a detailed look at some technical revisions to the regulations for Damages-Based Agreements (DBAs).
The commission does not extend to ‘hybrid’ DBAs, where additional forms of funding litigation can be coupled with a DBA to conduct a case. The Government has ruled this out as it is considers such arrangements could encourage litigation behaviour based on a low risk/high returns approach.
The CJC working group, to be chaired by Professor Rachael Mulheron of Queen Mary University London, will be looking at the following issues:
- dividing into two sets the existing regulations with employment tribunal regulations (as per the 2010 regime) separated from regulations for civil litigation proceedings;
- clarifying that different forms of litigation funding cannot be used during a case when a DBA is being used to fund litigation;
- changing the regulations so that defendants will be able to use DBAs, by widening the application of the regulations where the party receives a specified financial benefit (rather than restricting them to receiving a payment); and
- clarifying that the lawyer’s payment can only come from damages, and the payment should be a percentage of the sum ultimately received (not awarded or agreed); and
- reviewing whether the regulations should contain provisions on terminating the DBA.
Lord Dyson, Master of the Rolls and Chairman of the CJC, said:
“While I am disappointed that the Government has decided not to permit hybrid DBAs, the CJC will – as ever – seek to assist and review the regulations in the areas suggested, and in the light of experience.
The CJC working group will be set up shortly, and membership and terms of reference published on the Council’s website.