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

The indemnity principle is a fundamental common law rule in costs recovery repeatedly referred to in the case law. In Harold v Smith [1860] 5 H&N 381 the principle was summarised as follows:

“Costs as between party and party are given by the law as an indemnity to the person entitled to them: they are not imposed as a punishment on the party who pays them, nor given as a bonus to the party who receives them”.

This means that a party cannot recover more in costs from an opponent than they are liable to pay their own legal representatives.