DBA insurance is an innovative legal expenses product designed to help law firms mitigate the risk of offering Damages-Based Agreements — fee arrangements where the firm is paid only if the case succeeds.

While DBAs are increasingly popular with corporate clients, many law firms remain cautious due to the potential downside if a case fails. DBA insurance helps bridge that gap.

By insuring a portion of the time costs recorded under a DBA, law firms can confidently present alternative fee proposals without shouldering all the financial risk. For example, a fee earner may be able to demonstrate to a risk committee or finance team that they will recover at least 50% of their time costs, even if the case is unsuccessful.

At the same time, the firm retains the upside potential of a successful outcome — which could result in a higher realisation than under traditional billing models or CFAs (Conditional Fee Arrangements).

“This is the missing piece of the pricing jigsaw. It could be one of the most significant industry developments since the introduction of the funding market.”
— Justin D’Agostino, Global Head of Practice, Herbert Smith Freehills

A similar insurance solution is available to support Conditional Fee Arrangements (CFAs). Depending on the case dynamics, CFA insurance can be used to protect against the financial risks of a conditional arrangement — helping firms manage exposure while staying commercially flexible.

Every case is different. We work with law firms to structure bespoke combinations of legal insurance and funding that match the economics of a particular matter.

For example, we might structure a package that includes:

• DBA insurance to cover part of the firm’s fee risk,

• Adverse costs insurance for the claimant, and

• Disbursement funding via a litigation funder like Erso Capital.

That’s four stakeholders — the client, law firm, insurer, and funder — aligned in a tailored, risk-managed strategy.

We recommend engaging with our team at an early stage to explore your options. The right combination of alternative fee structures, insurance, and funding can transform the financial outcome — for both firm and client.