More on the indemnity principle

Up in NSW, the system of reviewing legal costs is very different from here in Victoria.  It is done on the papers by non-judges.  As District Court Judge Peter Johnstone said in Bellevarde Constructions Pty Ltd v CPC Energy Pty Ltd [2011] NSWDC 55:

‘the costs assessment process is a statutory process that is neither wholly judicial, nor wholly adversarial, as there are strong elements of an inquisitorial nature involved. These features of the process are important to understand when evaluating decisions as to a matter of law made in the course of the assessment.’

A costs assessor was assessing the party party costs payable by one party to a more successful party in litigation.  He satisifed himself that the indemnity principle was not breached by perusing the costs agreement which regulated the solicitor-client costs payable by the more successful party to its own lawyers, and was ‘satisfied that the amount claimed by the costs applicant is no greater than the amount for which the costs applicant would be liable pursuant to those agreements’.

Judge Johnstone said, applying Shaw v Yarranova Pty Ltd [2011] VSCA 55, that a costs assessor need not take evidence of the actual amount charged by the more successful party’s lawyers in every case, but must do so when there is evidence casting doubt on the proposition that the claim for party party costs was no greater in total — not per item — than the solicitor-client costs.  Here there was sufficient evidence to cast such doubt, and the costs assessor was wrong not to have insisted on evidence as to the amount payable on a solicitor-client basis.

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