KA-2024-000244 - [2025] EWHC 2070 (KB)

In civil legal aid cases, long-standing provisions have been in place to circumvent the indemnity principle. The present Regulation 21 of the Civil Legal Aid (Costs) Regulations 2013 explicitly provides for this, stating that:

“the amount of costs to be paid under a legally aided party’s costs order or costs agreement must be determined as if that party were not legally aided”.

This regulation, in conjunction with section 28(2) of LASPO, allows for the routine recovery and retention of costs in excess of what the LAA would pay, despite the client having no direct liability for those additional costs. No equivalent provision exists for criminal legal aid to disapply the indemnity principle.

The LAA’s position is that a successful legally aided party can recover the costs the LAA has met, a concept sometimes referred to as a “legal fiction,” given that the assisted party does not have a liability to pay fees as such. This is predicated on the legally aided party’s obligation to account to the LAA for recovered costs whether by virtue of the statutory charge or otherwise. The fact that this liability is contingent on recovery does not prevent it from satisfying the indemnity principle. However, this extends only to the sums properly payable by the LAA. The principle that there could be a recovery under this “legal fiction” was not in issue before the Judge.