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To say that law firms are a little reticent about DBAs is a colossal understatement along the lines of ‘did we just scrape an iceberg?’! Our collective betters in the shape of the senior figures at the MoJ and judiciary are most excellent at enacting legislation with holes that make Swiss cheese look solid. The problem comes when law firms see the potential of DBAs but the risk of doing one outweighs the benefits. No one wants to be the guy or gal who falls in the hole and gets pointed at as the test case sails towards the Supreme Court. There be dragons. But like St George, we at QLP hate the idea of twiddling our thumbs and believe we need to get stuck in and slay a few dragons, so here goes.

Flicking through my idiots guide to the law and Latin, I can see that any right minded compliance partner would look at the Regulation and think ‘no meruit entitlement’ and think ‘yuk’ don’t like that. So the risk of breaching DBA regulations and earning nothing, because the contract is unenforceable, is a real threat which must be factored into any assessment. We think the potential pitfalls are principally:

• The perceived new conflict that now exists between the client and solicitor; is a DBA unsuitable when the outcome for the client may have been more advantageous under a CFA? It looks as if a CFA is cheaper in the short term but a DBA is better in the long term and therefore a sliding scale of return linked to the point of settlement could be the solution.
• The ‘Ontario’ model. This model is the only LASPO acceptable model and deviation from it will lead to trouble.
• The ‘hybrid’ DBA looks set to be barred and quite rightly too. The regulations make it clear that the indemnity principle applies and if your client has no liability to pay then nor does the opponent. ‘Hybrids’ stalk an unattractive hinterland that seeks perhaps to subvert a DBA by introducing the discounted CFA model within it, so be aware that the current mob at the MoJ don’t like anything unless it is ‘vanilla’.

Getting the basics right

Unusually for civil servants, what is required within a DBA document is pretty sparse, name the legal proceedings, when is the client required to pay, how much is the contingency, etc. It might be worth clearly defining terms, for instance what is meant by Costs, Expenses, Lose, Appeal, etc. Also, watch out for grey areas, for instance counsel fees are a cost but what about ATE premiums? Should be an Expense but is it…

Despite all the negativity, the future glows brightly for DBAs because they finally sever the link of remuneration being limited to the hours spent. Lawyers can now be rewarded on results not how much midnight oil was burnt. This is sensible and potentially good for litigation clients.

So we at QLP safely here in Chateau ten miles from the front line say to you lawyers, sally forth and give DBAs a go.

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