A costs judge has dismissed the appeal of a firm seeking £1.6m in fees under a damages-based agreement (DBA) after the agreement did not comply with the strict rules regulating DBAs as no ‘payment out of sums recovered’ was due given the matter was challenging the validity of the Will.
The case concerned costs relating to the validity of two wills of Kevin Patrick Frain (aka Kevin Patrick Reeves), a wealthy businessman with an estate valued at approximately £100 million. The appeal was brought by the defendants (Simon Frain and Mark McKinnon) against a decision by Costs Judge Brown, who had ruled that the Damages-Based Agreements (DBAs) under which their solicitors were retained were unenforceable.
In 2022, Green J ruled in Reeves v Drew & Ors [2022] EWHC 159 (Ch) that a 2012 will, written by Kevin Patrick Frain, was valid. In January 2023 a contempt application against Louise Reeves dismissed by Joanna Smith J. In January 2025 Judge Brown ruled the DBAs unenforceable after a costs hearing in November 2024. The appeal was heard in July 2025 and the judgement handed down in September.
Costs Judge Brown agreed with the claimant that the DBAs were unenforceable because they did not provide for ‘payment out of sums recovered’, as specified under the DBA regulations. No sums had in fact been recovered or even sought, as the claim had simply been for a ‘declaration’ over the validity of a will.
The appeal focused on two key issues; whether payment under a DBA must be made only from sums recovered and whether contingent benefits (e.g., a declaration of will validity) qualify as recoverable sums; and whether counsel’s fees can be charged as expenses outside the DBA payment.
The court held no assets were recovered from the opposing party (Louise Reeves) by the appellants. The declaration of the 2012 will’s validity did not constitute a financial recovery under the Regulations. and the DBAs failed to comply with strict limits of damages-based funding arrangements in litigation. The court rejected the argument that contingent rights or future benefits could satisfy the definition of “recovered sums.”
The issue of recovering counsel’s fees was contrary to Regulation 1(2), which includes such fees within the DBA payment. In his conclusion Mr Justice Dias emphasized that DBAs are tightly regulated exceptions to the common law prohibition on champerty. The judgment stressed that access to justice must be balanced against client protection and regulatory compliance.
Reeves, who was represented by Stokoe Partnership, commented:
“I am absolutely thrilled with this win. This case highlights an important principle, that payment arrangements must be fair, proportionate, and protected against abuse or exploitation. Solicitors should not be allowed to have too much skin in the game.”
Stokoe Partnership added:
“This judgment provides much-needed clarity on the operation of damages-based agreements. The court has confirmed that such agreements must strictly comply with the statutory framework if they are to be enforceable. The decision has important implications for the wider use of DBAs in complex litigation.”
