On 1st June the Scottish Government introduced the Civil Litigation (Expenses and Group Proceedings) Bill , which contains a number of changes to litigation funding in Scotland.
Chief among the changes is that, for the first time, Scottish solicitors will be able to enter into damages based agreements (DBAs) with their clients.
The new Scottish model differs from the regulations currently in place in the English and Welsh courts. The key difference is that the Scottish bill allows concurrent retainers, enabling solicitors to bill their fees during the life of the litigation, and then, if successful, recover a percentage of the damages ultimately recovered. This type of ‘hybrid’ arrangement is not permitted in the English courts because the English DBA regulations allow for only a ‘single payment’; upon successful conclusion and only from the damages recovered.
In contrast, the new Scottish model allows fees which can be billed throughout the life of the matter to be retained if the matter is unsuccessful. If the claim is successful, the solicitor will be entitled to a percentage of the damages but the combined payment cannot exceed 50% of the damages received in commercial litigation.
Despite Lord Justice Jackson’s comments on DBAs in his report of 2013, uptake of DBAs in England has been slow. It seems litigators are unwilling to accept the risk of not receiving any payment, in addition to the inability to receive any payment of fees during the life of the litigation.
It will be interesting to see how well the DBA regulations are received in Scotland, and whether the rule makers in England and Wales will follow suit.