Damages Based Agreement Employment: A Comprehensive Guide

In the world of employment law, damages based agreement (DBA) employment has become an increasingly popular way for employees and employers to settle disputes without the expense and hassle of going to court. In this article, we`ll explore what damages based agreement employment is, how it works, and the advantages and disadvantages of using this approach.

What is Damages Based Agreement Employment?

A damages based agreement is a contract between an employee and employer that sets out the terms of any potential settlement reached by the parties. Under a DBA, the employer agrees to pay the employee a percentage of the amount awarded in compensation if the claim is successful. In other words, the employee is compensated based on the outcome of the case. A DBA is usually used in employment tribunals to resolve disputes related to unfair dismissal, discrimination, and whistleblowing.

How Does a Damages Based Agreement Work?

Under a damages based agreement, the employee and employer agree to set a percentage of the compensation award that the employee will receive if successful in their claim. This percentage can vary, but it usually ranges between 10% and 50%. If the employee is unsuccessful in their claim, they will not receive any payment. Moreover, the percentage to be paid to the employee under a DBA cannot exceed 50% of the total compensation awarded.

Advantages of Damages Based Agreement Employment

DBA employment can be a cost-effective way to resolve disputes between the employer and the employee. Rather than paying expensive legal fees, the employer can agree to pay a percentage of the total compensation awarded to the employee. If the employee succeeds in their claim, the employer pays the percentage agreed, and the employee receives fair compensation for their injury or loss.

Another advantage of damages based agreement employment is that it incentivizes legal professionals to work harder on behalf of their clients. Since the legal fees are contingent on the outcome of the case, lawyers and legal professionals are motivated to work hard and provide the best possible representation for their clients.

Disadvantages of Damages Based Agreement Employment

One of the principal disadvantages of DBA employment is that it can lead to high legal fees. Since the fees are based on a percentage of the total compensation awarded, if the compensation awarded is high, the legal fees will be correspondingly high, even if the case was not particularly complex or difficult.

Another disadvantage of DBA employment is that it may not be suitable for all cases. DBA employment is typically used for claims involving employment law, but it may not be appropriate for other types of legal disputes, such as commercial litigation or personal injury cases.


Damages based agreement employment can be an effective way to resolve disputes between employees and employers, providing a cost-effective solution that incentivizes legal professionals. However, it`s essential to weigh the costs and benefits of DBA employment before deciding whether it`s the right approach for your case. If you`re considering DBA employment, seek advice from a legal professional experienced in employment law to ensure that you fully understand the risks and benefits involved.