Lawyers who enter into damages-based agreements (DBAs) can be paid in the event of early termination, the High Court has confirmed
In Lexlaw Ltd v Zuberi [2020] EWHC 1855 (Ch), Lexlaw sued their client for non-payment of fees, having worked for her on a DBA basis in a financial mis-selling claim, resulting in her receiving an offer of more than £1m.
She argued the DBA was void and unenforceable as it included an obligation for her to pay legal costs and expenses in the event of early termination. However, Judge Parfitt held the DBA was valid.
Ali Akram, senior partner at Lexlaw, said the judgment ‘provides welcome judicial clarity on the validity of early termination payment clauses in DBAs which in turn promotes access to justice as more legal professionals will now be willing to enter into such funding arrangements.’
