Whilst the prospect of earning a share in the client’s damages is an attractive proposition, many lawyers are yet to take the plunge. This is mainly due to a combination of the financial implication of a loss and the uncertainty surrounding the drafting of the DBA Regulations, in particular, the inability to offer partial DBAs.
With the growth of the third party funding market in recent years, it has become common place for lawyers to settle for receiving their hourly rate on an ongoing basis at the cost of seeing money that could have been channelled into their firm earned as a success fee by the funder. But as more lawyers gain experience of making an application for funding, they are realising that if a case is good enough to successfully jump through a funder’s hoops, it follows that it’s good enough for them to back themselves. Whilst some law firms are taking the decision to seek their piece of the pie through setting up their own funds, others are utilising insurance to provide them with the financial comfort they need in order to offer DBAs and access similar significant returns.
Click here to read Verity Jackson-Grant’s article on how law firms are using DBA insurance to overcome their fear of damages-based- agreements.
This article first appeared on the Practical Law Dispute Resolution blog on the 5th July 2018.