A damages-based agreement (DBA) is a type of contingency fee agreement between a lawyer and a client. The lawyer receives a percentage of the damages awarded to the client if the case is successful. This type of agreement has gained popularity in recent years as it enables clients to access justice without having to pay for legal fees upfront.
The Law Society of England and Wales has developed a DBA template to help solicitors and their clients understand the legal requirements of such agreements. The template is designed with simplicity and transparency in mind, ensuring that both parties are fully aware of the terms and conditions of the agreement.
The DBA template covers a range of issues, including the percentage of damages that the lawyer will receive, the circumstances in which the agreement may be terminated, and the client’s obligations in terms of cooperation and disclosure. The template also sets out the procedure for payment of the lawyer’s fees, including any disbursements and VAT.
Under the DBA template, the lawyer’s percentage share of the damages is capped at 50%. This is to ensure that the client receives a fair and reasonable amount of damages. In addition, the agreement cannot be terminated by either party without written notice.
It is important to note that the DBA template is not suitable for all types of cases. It is particularly suitable for cases where the damages awarded are likely to be high, such as personal injury or medical negligence cases. In other cases, such as commercial disputes, a DBA may not be appropriate, and other fee arrangements may be more suitable.
In conclusion, the Law Society’s DBA template provides solicitors and their clients with a practical and transparent way of entering into a contingency fee agreement. The template ensures that both parties are fully aware of the terms and conditions of the agreement and provides a framework for the payment of legal fees. It is important for solicitors and clients to carefully consider whether a DBA is appropriate for their case and to seek legal advice before entering into such an agreement.
