The indemnity principle applies not only where the receiving party has no liability to its solicitor, but also where the solicitor has agreed to act at a reduced fee. Where a paying party raises a bona fide challenge based on the indemnity principle, the Taxing Master must order production of retainer and disclosure documents relevant to the receiving party's actual liability to their lawyers. A reviewing judge who correctly identifies a fundamental procedural error before the Taxing Master should ordinarily remit the matter rather than attempt to determine it on insufficient evidence. The solicitor's own assertion that the indemnity principle has not been breached is not a substitute for the Court determining the matter on proper materials.
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