Budget departures & the indemnity principle

In brief

• Advising clients: certifying a budget and making the client aware of costs estimates.
• Reasonable and proportionate costs: setting figures.
• Costs judges: appraisal and evaluation.

Solicitors are required to advise clients about the costs in a case on a continuing basis. In a budgeted case, not only is there is a practical requirement to certify the budget, a solicitor must be satisfied that the client is aware of the costs estimate and has agreed to be responsible for the costs up until the conclusion of the case up to the amount of the budget. This is to ensure that any budget or bill presented does not breach the indemnity principle. The budget and the bill will contain a certificate to this effect. This is particularly important when considering whether a paying party may be able to demonstrate good reason for the court to depart from a budget.

Where a cost management