Zuberi v Lexlaw Limited
Date: 14th January 2021
Court: Court of Appeal
Facts: Christopher Snell acted for the successful Respondent in a dispute relating to a Damages Based Agreement, in Zuberi v Lexlaw Limted.
Practice Area: Commercial Litigation
In its judgment handed down on 14 January 2021 the Court of Appeal has unanimously upheld the validity of a Damages Based Agreement (“DBA”) which included a clause providing that – in the event of early termination of the DBA by the client – the client was liable to pay the solicitors’ time charges at an hourly rate for time spent working on the claim together with the costs of instructing third parties (such as Counsel) and other disbursements.
Since the inception of the DBA Regulations 2013 (the “Regulations”) the widely held view was that the charging of termination fees was prohibited by the Regulations; such that a DBA including a provision allowing solicitors to charge for work done in the event of early termination was unlawful and any DBA including such a provision unenforceable.
The result, as recorded by Lewison LJ at §21 of the judgment, has been to cause “considerable uncertainty in the legal profession; and a widespread fear that if a client terminates a retainer, the lawyer will end up not being paid anything for what might have been months or even years of work” such that “neither the Bar Council nor the Law Society has provided a model form of DBA.