DeNovo Law

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This was the issue  HHJ Karen Walden-Smith considered in Zavorotnii v Malinowski & Others [2025] EWHC 260 (KB).

Background: The case arose from a road traffic accident on 31 March 2018, in which the claimant, Mr Leon Zavorotnii, sustained severe injuries while a passenger in a vehicle driven by the defendant, Mr Lucasz Malinowski. The vehicle collided with a stationary HGV parked without lights. Mr Malinowski pleaded guilty to driving without due care and attention, while a Mr Nikolov admitted to leaving the HGV unlit overnight. The claimant, who suffered life-altering injuries, brought a personal injury claim against Mr Malinowski, who in turn sought contribution from Mr Nikolov and his insurer, the National Farmers Union Mutual Insurance Society Limited (NFU).

The litigation was complex, involving language barriers, significant quantum issues, and a protracted procedural history, including late initiation of proceedings under the Limitation Act 1980. Judgment was ultimately entered in favour of the claimant, with damages to be assessed.

Costs Management Dispute: At a costs case management hearing on 20 December 2024, the court addressed the budgeting of costs for three phases of the litigation: disclosure, witness statements, and expert evidence. The claimant sought approval for a budget of £511,125.30, while the defendant proposed £261,374.30. The court approved a budget of £308,909.30, representing a 40% reduction from the claimant’s proposal but an 18.2% increase over the defendant’s offer.

The defendant argued that the claimant’s budget was overly ambitious and unrealistic, warranting a departure from the usual “costs in the case” order. Instead, the defendant sought an order requiring the claimant to pay the costs of the costs management hearing.

Considering recent authorities, including Worcester v Hopley [2024] EWHC 2181 (KB) and Jenkins v Thurrock Council [2024] EWHC 2248 (KB) (which established that courts may depart from the default “costs in the case” order in costs management hearings if a party’s budget is deemed unreasonable or excessively ambitious), HHJ Walden-Smith held that while the claimant’s budget was overly ambitious, it was not entirely unrealistic. The claimant achieved 60% of the budget sought and secured approval for costs 18% above the defendant’s offer. However, the judge noted that the claimant had increased its budget for two phases after the initial case management hearing, widening the dispute rather than narrowing it.

In light of these factors, the court made a “costs in the case” order but issued a warning that future cases involving unrealistic budgets could result in adverse costs orders against the party seeking approval.

The ruling serves as a reminder to approach costs budgeting with care, ensuring that claims are grounded in realism and proportionality to avoid potential costs sanctions.

Details

This was the issue  HHJ Karen Walden-Smith considered in Zavorotnii v Malinowski & Others [2025] EWHC 260 (KB).

Background: The case arose from a road traffic accident on 31 March 2018, in which the claimant, Mr Leon Zavorotnii, sustained severe injuries while a passenger in a vehicle driven by the defendant, Mr Lucasz Malinowski. The vehicle collided with a stationary HGV parked without lights. Mr Malinowski pleaded guilty to driving without due care and attention, while a Mr Nikolov admitted to leaving the HGV unlit overnight. The claimant, who suffered life-altering injuries, brought a personal injury claim against Mr Malinowski, who in turn sought contribution from Mr Nikolov and his insurer, the National Farmers Union Mutual Insurance Society Limited (NFU).

The litigation was complex, involving language barriers, significant quantum issues, and a protracted procedural history, including late initiation of proceedings under the Limitation Act 1980. Judgment was ultimately entered in favour of the claimant, with damages to be assessed.

Costs Management Dispute: At a costs case management hearing on 20 December 2024, the court addressed the budgeting of costs for three phases of the litigation: disclosure, witness statements, and expert evidence. The claimant sought approval for a budget of £511,125.30, while the defendant proposed £261,374.30. The court approved a budget of £308,909.30, representing a 40% reduction from the claimant’s proposal but an 18.2% increase over the defendant’s offer.

The defendant argued that the claimant’s budget was overly ambitious and unrealistic, warranting a departure from the usual “costs in the case” order. Instead, the defendant sought an order requiring the claimant to pay the costs of the costs management hearing.

Considering recent authorities, including Worcester v Hopley [2024] EWHC 2181 (KB) and Jenkins v Thurrock Council [2024] EWHC 2248 (KB) (which established that courts may depart from the default “costs in the case” order in costs management hearings if a party’s budget is deemed unreasonable or excessively ambitious), HHJ Walden-Smith held that while the claimant’s budget was overly ambitious, it was not entirely unrealistic. The claimant achieved 60% of the budget sought and secured approval for costs 18% above the defendant’s offer. However, the judge noted that the claimant had increased its budget for two phases after the initial case management hearing, widening the dispute rather than narrowing it.

In light of these factors, the court made a “costs in the case” order but issued a warning that future cases involving unrealistic budgets could result in adverse costs orders against the party seeking approval.

The ruling serves as a reminder to approach costs budgeting with care, ensuring that claims are grounded in realism and proportionality to avoid potential costs sanctions.