Law firm fined £11,000 for overcharging DBA clients


Cap: Solicitors can only take 25% of PI client’s damages

A law firm that charged personal injury clients more than it was allowed to when acting under damages-based agreements (DBAs) has been fined nearly £11,000 by the Solicitors Regulation Authority (SRA).

The 2013 DBA regulations only allow lawyers to deduct up to 25% of a client’s damages in personal injury cases for their fees, but Bradford firm Proctor & Hobbs was charging 35%.

According to a notice published yesterday by the SRA, an investigation found the firm had deducted this figure in all of the 13 road traffic accident files it sampled.

It later transpired that there were at least 26 client files where this occurred.

The firm then obtained independent advice, which confirmed that it was not entitled to deduct 35%. It refunded affected clients any deductions over 25% and paid them compensation of £100 each.

The SRA said Proctor & Hobbs failed to uphold public trust or act in the best interests of its clients, and breached the rules on complying with legislative requirements and keeping up-to-date with them.

A fine was appropriate because the misconduct was “serious” and “clients will have been placed in a disadvantageous negotiating position in agreeing to the firm’s 35% deduction from damages”.

Applying the SRA’s fining guidance led to a penalty of 2.8% of the firm’s annual turnover and then reduced “to give credit for the firm’s swift and decisive action once the issue had been identified”.

This led to a figure of £10,730 plus costs of £1,350.




Blog


Beyond the PII premium – rethinking risk

Professional indemnity insurance renewal is often treated as an annual pricing exercise. But it is also a chance to show how effectively you identify, manage and mitigate risk.


The AI governance gap in law firms and why it matters now

A third of law firms are already using AI tools with no formal policy in place to govern how AI gets used, what data goes into it, or who’s accountable when something goes wrong.


Information isn’t oversight – lessons from the PM Law review

The PM Law review’s real findings perhaps point to a failure mode applying to any organisation sitting on scattered risk information.


Loading animation