The government last week withdrew plans to create a legislative framework for contingency fees in contentious work.

Amendments proposed for the Coroners & Justice Bill aimed to regulate so-called damages-based agreements (DBAs) used in tribunals – which are deemed non-contentious – and also allow the justice secretary to extend the use of DBAs in future.

However, they now no longer provide for the possibility of permitting DBAs in litigation. The sole focus is on regulating the current use of DBAs, particularly in employment tribunals.

The Ministry of Justice said the move in part reflected concerns that there should be full public consultation and debate before DBAs are allowed in litigation.

A Law Society spokeswoman welcomed the retreat, but said it was still wrong to legislate at this late stage in the bill’s passage. It is still unclear whether the government will seek power to cap the percentage of damages that solicitors can take.