A Hybrid Damages Based Agreement is an agreement is similar to a contingency fee, or Damages Based Agreement, but includes an additional provision for the solicitor to be paid an amount to cover their costs or mitigate the risk they would take with a standard contingency fee /Damages Based Agreement.
Damages Based Agreements generally refer to the agreement between a solicitor and his/her client as to the basis of the solicitor’s fees, namely that they will be based on the damages recovered by the client. This is usually a fixed percentage of the amount recovered for your interest or upon judgment handed down in litigation proceedings.
More information about Damages Based Agreements can be found here.
However, a Damages Based Agreement places a lot of risk on the solicitor, both in terms of the risk of recovering their costs and of the obligations under such agreements in accordance with the regulations governing such agreements.
To mitigate this, the ideal solution would be a Hybrid Damages Based Agreement which combines the Contingency Fee aspect of a Damages Based Agreement together with an underlying arrangement to provide for the solicitors at a low negotiated rate sufficient to at least cover the solicitor’s costs of managing such risks.
There are two types of Hybrid Damages Based Agreement – a Sequential Hybrid Damages Based Agreement and a Concurrent Hybrid Damages Based Agreement.
A Sequential Hybrid Damages Based Agreement is one where an alternative fee agreement (for example a standard time cost arrangement) is followed by a Damages Based Agreement. This can be useful for circumstances where, for example, initial legal work is required before a solicitor will commit to a Damages Based Agreement or alternatively where an initial stage of proceedings needs to be conducted before a Damages Based Agreement can be entered.
A Sequential Hybrid Damages Based Agreement is permissible and can be entered into with your solicitor, subject to their agreement.
A Concurrent Hybrid Damages Based Agreement is an agreement whereby the solicitor agreements to enter into a Damages Based Agreement subject to a condition that his/her time costs are paid at a lower level than their normal rates.
This will allow a client to access to legal advice and assistance to a considerably greater degree than they may otherwise be able to afford, with the solicitor offering his/her services at this lower rate in exchange for the Contingency Fee, or percentage of any judgment obtained by the client.
Unfortunately, as of writing, a Concurrent Hybrid Damages Based Agreement is not permissible for clients seeking to issue legal proceedings. This was last considered in 2015 but the legal position did not change as a result.
However, for non-contentious and other out-of-Court instructions, these types of agreement may be available to you, subject to a review of your circumstances.
At Francis Wilks & Jones we often work on projects under the terms of a CFA or a DBA and will always consider a Hybrid Damages Based Agreement subject to first reviewing your circumstances.
Please call any member of our commercial litigation team for your consultation now on 020 7305 7669. Alternatively e mail us with your enquiry and we will call you back at a time convenient to you.
