The Indemnity Principle
The indemnity principle, a term unrelated to the concept of indemnity costs, stipulates that a paying party cannot be ordered to pay more than the receiving party has already agreed to pay his solicitor, the retainer.
The principle causes anomalies for pro bono representation where, because the lawyers have agreed to represent the party for no cost, they cannot subsequently ask the court for a costs award when they win. However, section 194 of the Legal Services Act 2007 allows the court to order a party who loses against pro bono representation to make an appropriate charitable donation in lieu of costs. These provisions come into force progressively from 30 June to 1 October 2008.
There are specific exceptions to the principle for:
- In-house lawyers;
- Conditional fee agreements;
- Legal aid; and
- Litigants in person.
Read more about this topic: Costs (English Law)
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