KA-2025-000017 - [2025] EWHC 2311 (KB)

The prime question in Issue 2 is whether the payment to the solicitors (the representatives) under a lawful DBA must include counsel’s fees or whether it is legitimate to charge them as expenses in addition to the payment. The starting-point is an examination of the content of the instant DBAs. Without reciting all the relevant clauses, the clauses touching on this issue include Clause 1 that defines “expenses” as including “the cost of instructing … barristers” and Clauses 9.2 and 9.2.5. These state:

“Expenses typically include … Fees paid to a barrister. These may be for advice given in a conference, or for representing you at a hearing. If your case settles shortly before a hearing, and your barrister has already undertaken the preparation for that hearing, then you may still have to pay for part of their fee.”

The question becomes whether the expenses (disbursement) arrangement under the instant DBAs is compliant with the Act and/or the Regulations. The Act does not deal with this point. Therefore, one turns to the Regulations. The appellants submit that the Regulations “do not proscribe the payment of counsel’s fees in addition to the payment by the client to the solicitors”. The submission is alternatively put as “there is no positive proscription in the regulations that prevents counsel's fees be charged or included as expenses.” The rationale for this argued-for construction is that fees to counsel “are expensive” and the uncertainty about how much the cost of counsel would have “a chilling effect” on the willingness of solicitors to agree to DBAs, so defeating the statutory objective of greater access to justice.

To evaluate this submission, one must begin with the Regulations themselves and revisit the precise framing of regulation 1(2). I omit for this analysis irrelevant text:

“… “payment” … excludes expenses but includes … any disbursements incurred by the representative in respect of counsel’s fees”

Regulation 1(2), therefore, excludes expenses from the payment. It is the latter part of the definition that poses difficulties for the appellants’ construction. When asked to deal with this apparent problem, the response was that the definition is being “elevated” into “something more draconian than the language can bear” since regulation 4 does not expressly prohibit the payment of counsel’s fees outside the contingency payment. I cannot accept this submission. The regulation 1(2) definition is clear and unambiguous. The point of a definition is to define. On the question of expenses, it does so clearly. The payment to the representative under the DBA must include (any) counsel’s fees. In the instant case, the DBAs purport to charge counsel’s fees in addition to the payment. That, for my part, is proscribed by the Regulations. I have received no convincing argument to the contrary.

One is, therefore, left with clauses in the DBAs that offend the express terms of the Regulations. Faced with this potential difficulty, the appellants advance further arguments. I consider them in turn.