Insurance solution
DBA Insurance
Cover addressing fee risk carried under damages-based agreements.
- A judgment or award won
- A judgment against you
- Funder capital deployed
- Law firm fees and WIPThis cover
- Security for costs
- The opponent's costs
- Disbursements
- Own legal costs
Illustrative. The exposures a dispute can put on a balance sheet. What a policy responds to is set by its wording.
What is DBA Insurance?
DBA Insurance is a form of litigation risk transfer that may be arranged around damages-based agreement risk. Cover addressing fee risk carried under damages-based agreements. Terms, where available, are set case by case through underwriting.
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Schedule · specimen
DBA Insurance
Not a policy. A specimen to show how this cover is structured. Cover exists only when a policy is issued, on its own wording.
- Terms
- Terms, where available, are set case by case through underwriting.
- Protects
- Damages-based agreement risk, depending on policy terms.
- Terms
- Limit, premium and conditions are set by underwriting on the specific risk.
Clause 1
The insured
Who it is for
Firms and clients using damages-based agreements, where the firm's fee is a share of damages recovered.
Clause 2
Insuring clause
What risks can be protected
The firm's time and disbursements if nothing is recovered, and the client's adverse costs.
Clause 3
Operation of cover
How it works
Under a DBA the firm is paid from damages, so a loss leaves the firm unpaid.
Insurance can protect the firm's time cost and disbursements. The UK Supreme Court's 2023 decision in PACCAR, treating many litigation funding agreements as DBAs, has made careful drafting of all outcome-based arrangements more important; reform has been recommended, so check the current position.
Clause 4
Underwriting
Underwriting factors
The core assessment is the same as for Law Firm Litigation Insurance: merits, quantum, a proportionate budget, recoverability and the legal team.
The points that weigh most for this cover are set out under "What risks can be protected" and "How it works" above.
Clause 5
Proposal documents
Information required
The standard presentation pack described on the Law Firm Litigation Insurance page, plus the documents specific to this cover noted above.
Clause 6
Limit, premium and staging
Potential structure
- (a)Firm-side time and disbursement cover;
- (b)Client-side ATE; and
- (c)Premiums contingent on outcome.
Clause 7
Alternatives
Alternatives
- (a)Conditional fee agreements;
- (b)Hybrid DBAs where permitted; and
- (c)Third-party funding.
Clause 8
Territory
Jurisdiction notes
Forum rules apply as described on the Law Firm Litigation Insurance page; the jurisdiction guides linked below set out the position forum by forum.
Specimen for explanation only. Terms, limits and exclusions are set by underwriting on each matter and by the wording issued.
Frequently asked
Is DBA insurance the same as Defense Base Act insurance?
No. Here DBA means damages-based agreement, a fee arrangement for lawyers. The US Defense Base Act is unrelated and concerns workers' compensation for employees of certain overseas contractors.
What is a damages-based agreement?
An arrangement in which the lawyer's fee is a percentage of the damages recovered, and nothing if the case is lost. In England and Wales DBAs are regulated and capped by statute and regulations.
How did the PACCAR decision affect DBAs and funding?
In 2023 the UK Supreme Court held that funding agreements paying the funder a percentage of damages can be DBAs, making many unenforceable unless they met the DBA rules. Reform has been recommended; check the current position before relying on any structure.
Is DBA Insurance available for my dispute?
Availability depends on the merits, the quantum, the costs profile and the counterparty. Every risk is assessed individually and no cover exists until a policy is issued.
Does this quote a price?
No. Pricing is a function of the specific risk and is never quoted in the abstract. Nothing on this page indicates the cost or availability of cover.
Can it be combined with litigation funding?
Frequently, yes. Funding supplies capital; insurance defines the downside. The two are often structured together.
General information only. This page is not legal, financial, investment or insurance advice. Any insurance is subject to underwriting and to the terms of the policy wording issued.
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