Insurance broker TheJudge has launched a new DBA insurance product for commercial dispute resolution teams willing to accept an engagement on a contingency fee basis.
Under the new product, law firms are protected for an agreed level of its fee risk when operating on a DBA, a report from Solicitors Journal said. The firm is reimbursed some 40-60% of its fee risk if the case is unsuccessful.
A premium is only payable if the case is won. The report said a law firm can claim on the policy even if a case is lost or if the contingency fee recovered is too small to reimburse the fee budget.
DBA Insurance offers a way for law firms to take potentially lucrative cases on a contingency fee basis, while managing the downside risk, according to the insurer.
“DBA insurance ensures that a law firm receives some fee income, regardless of the outcome of the case,” it said.
“Damages Based Agreements allow commercial litigators in England & Wales to offer contingency fee arrangements to their clients,” it said. “This can help to support new business development in what is an increasingly competitive legal market, while increasing the law firm’s profitability, given the potential financial rewards available.”
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