The recoverability of costs is a significant factor in legal
proceedings.
Most commercial agreements contain clauses seeking to indemnify
an innocent party absolutely against any legal costs that might be
incurred because of another party's breach.
Unfortunately, clauses of this type are regularly recycled from
existing precedents, without any regard to the relevant authorities
and the strict approach taken by the court in determining the scope
of such clauses.
All too often, this leads to significantly less protection
against costs than intended by the parties to a contract (and in
many cases, by the solicitor responsible for preparing the
document).
Considering the potential commercial advantages that may be
obtained by a favourable costs order, commercial lawyers and
litigators alike ought to be aware of the difficulties that may
arise in seeking to enforce a contractual indemnity in respect of
costs and ensure that their clients are properly advised in
