C1 Part IILegal Services

Annotations:
Modifications etc. (not altering text)

Miscellaneous

58AAF1Damages-based agreements F5relating to employment matters

1

A damages-based agreement which F8relates to an employment matter and satisfies the conditions in subsection (4) is not unenforceable by reason only of its being a damages-based agreement.

2

But F7(subject to subsection (9)) a damages-based agreement which F2relates to an employment matter and does not satisfy those conditions is unenforceable.

3

For the purposes of this section—

a

a damages-based agreement is an agreement between a person providing advocacy services, litigation services or claims management services and the recipient of those services which provides that—

i

the recipient is to make a payment to the person providing the services if the recipient obtains a specified financial benefit in connection with the matter in relation to which the services are provided, and

ii

the amount of that payment is to be determined by reference to the amount of the financial benefit obtained;

b

F11a damages-based agreement relates to an employment matter if the matter in relation to which the services are provided is a matter that is, or could become, the subject of proceedings before an employment tribunal.

4

The agreement—

a

must be in writing;

F9aa

must not relate to proceedings which by virtue of section 58A(1) and (2) cannot be the subject of an enforceable conditional fee agreement or to proceedings of a description prescribed by the Lord Chancellor;

b

F10if regulations so provide, must not provide for a payment above a prescribed amount or for a payment above an amount calculated in a prescribed manner;

c

must comply with such other requirements as to its terms and conditions as are prescribed; and

d

must be made only after the person providing services under the agreement F3has provided prescribed informationF3has complied with such requirements (if any) as may be prescribed as to the provision of information.

5

Regulations under subsection (4) are to be made by the Lord Chancellor and may make different provision in relation to different descriptions of agreements.

6

Before making regulations under subsection (4) the Lord Chancellor must consult—

a

the designated judges,

b

the General Council of the Bar,

c

the Law Society, and

d

such other bodies as the Lord Chancellor considers appropriate.

F46A

Rules of court may make provision with respect to the assessment of costs in proceedings where a party in whose favour a costs order is made has entered into a damages-based agreement in connection with the proceedings.

7

In this section—

  • “payment” includes a transfer of assets and any other transfer of money's worth (and the reference in subsection (4)(b) to a payment above a prescribed amount, or above an amount calculated in a prescribed manner, is to be construed accordingly);

  • “claims management services” has the same meaning as in Part 2 of the Compensation Act 2006 (see section 4(2) of that Act).

F67A

In this section (and in the definitions of “advocacy services” and “litigation services” as they apply for the purposes of this section) “proceedings” includes any sort of proceedings for resolving disputes (and not just proceedings in a court), whether commenced or contemplated.

8

Nothing in this section applies to an agreement entered into before the coming into force of the first regulations made under subsection (4).

F129

Where section 57 of the Solicitors Act 1974 (non-contentious business agreements between solicitor and client) applies to a damages-based agreement other than one relating to an employment matter, subsections (1) and (2) of this section do not make it unenforceable.

10

For the purposes of subsection (9) a damages-based agreement relates to an employment matter if the matter in relation to which the services are provided is a matter that is, or could become, the subject of proceedings before an employment tribunal.