{"id":186223,"date":"2024-02-06T00:35:15","date_gmt":"2024-02-06T00:35:15","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=186223"},"modified":"2024-05-16T07:02:51","modified_gmt":"2024-05-16T06:02:51","slug":"damages-based-agreement","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/disputes-litigation\/damages-based-agreement\/","title":{"rendered":"What is a Damages-Based Agreement?"},"content":{"rendered":"\n

If your business falls into a commercial dispute<\/a> and takes court action, there will be a cost for civil litigation. There are different ways that commercial solicitors charge fees for their litigation services<\/a>, both during court cases and whilst out of court. It is essential that you, as a business owner, understand litigation funding so that you can make an informed choice for your business\u2019 financial benefit. A solicitor will usually charge their client an hourly rate in advance rather than a success fee. Alternatively, solicitors may charge the latter through a damage-based agreement (DBA) or contingency agreement. This article will explain damages-based agreements.<\/p>\n\n\n

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Guide to Resolving UK Business Disputes<\/div>\n
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This guide outlines how to resolve commercial disputes.<\/p>\n <\/div>\n \n\nDownload Now<\/a> <\/section>\n <\/div>\n\n\n\n\n

What is a Damage-Based Agreement?<\/h2>\n\n\n\n

A damages-based agreement aims to improve legal funding arrangements<\/a>. You may have an agreement with your commercial disputes solicitor when you proceed with litigation either in or out of court. This agreement allows you to share the risk of litigation in both contentious and non-contentious legal proceedings.\u00a0It specifies that the solicitor\u2019s legal fees depend on what damages you get following the court case.<\/p>\n\n\n\n

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Damages<\/a> are the reward a court orders the other party to pay you. Therefore, you will only be required to pay your solicitor in the event of a successful outcome. If you lose the case, you will not have any legal fees to pay your solicitor.<\/p>\n<\/div>\n\n\n\n

The court judgement for your commercial case will detail any damages. When a court awards the winning party damages, they will usually account for solicitor\u2019s fees. This helps to pay for the agreed-upon percentage of legal fees in the damages-based agreement. Your legal representative can specify a percentage of these, but it cannot exceed 50% of the damages for the proceedings, plus VAT. However, where you resolve your dispute out of court, your solicitor can charge any percentage for their fees in the agreement.  <\/p>\n\n\n\n

Why Choose a Damages-Based Agreement?<\/h2>\n\n\n\n

A commercial solicitor will not always be open to a damages-based agreement. However, where they are, your business may choose a damages-based agreement when taking legal action in a dispute. There are specific reasons why you may do so, which include:<\/p>\n\n\n\n