Legal Cost Specialists

Indemnity Principle

A further definition from The (Alternative) Legal Costs Dictionary:

Indemnity principle n. legal principle that receiving party cannot recover from paying party in legal costs more than he is liable to pay his own lawyer. To make the process fair on detailed assessment, the paying party is denied access to any information concerning the terms of the agreement between the receiving party and his lawyer unless the paying party can first establish a genuine reason to suppose more is being claimed than should be. This is done by producing the kind of evidence that the paying party is not entitled to see. If the paying party had such information, he would not need it. If he does need it, he is denied access to it because he has not been able to produce evidence as to what the evidence will show if it is disclosed. The Catch 22 of legal costs. To compensate for this rule, in the unlikely event that it can be shown that more has been claimed than should have been, the court will treat this as a “most serious disciplinary offence”. Where, during the course of a detailed assessment hearing such a breach is found to have occurred, the judge, mustering the full force of the majesty of the law, will say: “shall we move on to the next item then?”.

1 thought on “Indemnity Principle”

  1. Simon, ask yourself the reason why? Answer the actions of the paying party in days of yore of raising spurious issues of retainers routinely so much so that (per Hazlett v Sefton Metropolitan) that the courts lost patience. If there had been a modicum of reality shown rather than all retainers being challenged a more equitable system might prevail today

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