With respect to the sequential DBA, the group recommended that the government determine whether the lawyer can withhold the costs of the non-DBA funding agreement or whether this amount should be deducted from the DBA contingency tax. Maura McIntosh presents proposals to amend the rules on harm-based agreements (DBAs), examines key issues in the 2013 regulations and how the changes could encourage more practitioners to use DBAs. Compensation agreements (DBAs) are a form of financing of civil cases. DBAs are agreed between a lawyer and a client. A DBA is a form of “no win, no fee” agreement between a lawyer and a client. According to the proposals, the percentage of DBA is applied to the client`s “financial benefit” and not (necessarily) to an amount recovered. This means that DBAs should be available in a wider range of rights, for example. B in those that involve forfeiture of a valuable asset and not damages. In principle, this should also mean that ABDs can be used by defendant companies on the basis of the financial benefits that flow from the prevention or reduction of possible liability.

A damages agreement is a contingency fee agreement between a lawyer and a client, which provides that a client makes a payment to the agent if the client receives “some financial benefit” (usually from the losing party or through a recovered amount of compensation). The amount of the payment is set as a percentage of the compensation awarded by the DBA and agreed in advance with the customer. If the client does not succeed in his litigation, the lawyer is not paid for the work done under the DBA. Lord Justice Jackson recommended the introduction of contingency fees in part because he felt it was desirable for the parties to the proceedings to have maximum financing methods, particularly where CFA success fees and ATE insurance premiums can no longer be recovered from the losing party (see “Conditional Pricing Agreements (CFA) / After the Event (ATE) Insurance”). As a result, the conditional royalty agreement was replaced by the compensation agreement. As of April 6, 2013, a lawyer was authorized to enter into an agreement with his client that did not impose a higher expense burden on the defendant, with the exception of the traditional order of legal costs at the standard rate, which is consistent with the principle of compensation. A compensation agreement has been a very popular legal funding model in the United States in recent years, but it has only recently been introduced into the British legal system. The 2013 regulations prohibit hybrid DBAs because they provide, in accordance with Rule 4, that a DBA cannot compel the customer to pay anything other than the conditional payment of DBA (limited to 50% of all clawbacks) and non-counsel payments.