Past success is no guarantee of future success in budgeting!
For all personal injury litigators, costs lawyers and legal teams who prepare budgets as part of their high-value case management, take note of the warning in Zavorotnii v Malinowski [2025] – ‘costs in the case’ at the end of a hearing, just because it is the ‘norm’ does not mean it’s a guarantee. Producing an accurate budget is paramount to avoid risking adverse costs consequences at a budget hearing. Our Susie Power takes a look at one potential consequence of falling foul with an exaggerated budget.
The Claimant was a front seat passenger of the Defendant’s vehicle when it collided with the rear of a stationary HGV. The Claimant sustained catastrophic injuries as a result of the accident, including a traumatic brain injury whereby the Claimant no longer had the capacity to litigate. There were language barriers with the Claimant and his Litigation Friend which resulted in the need for translation of both documents and oral communications.
A CMC was listed in the claim and budgets were prepared by the parties. The Claimant’s budget was argued to be excessive in nature, with the court calling it borderline ‘unrealistic’. Despite the matter not being agreed at one CCMC and a further CCMC being required, the Claimant actually increased their budget and widened the issues between the parties rather than helping to narrow them. The Claimant’s costs sought for three phases (disclosure, witness statements and experts reports being dealt with at the second CCMC) was £511,125.30, the Defendant offered £261,374.30 with £308,909.30 being approved by the court. The Defendant sought an adverse costs order against the Claimant for the additional CCMC required to resolve these three phases.
As is often the case, we find ourselves going back to basics. CPR1.1(2) confirms that cases should be dealt with justly and at proportionate costs. CPR 1.3 states “the parties are required to help the court to further the overriding objective.” This is further supported by CPR 44.2 and the court’s discretion as to costs.
In this matter, the courts had to consider the conduct of both parties and the additional time spent by the courts dealing with issues that could have been dealt with between the parties.
There is a detailed breakdown of figures in the judgment, however suffice to summarise here that the Claimant ‘beat’ the Defendant’s offer during the negotiations phase, however the reductions applied to the three phases were not insignificant. This allowed the court to consider whether the Claimant should have an adverse costs order against them. As matters stood, the increases in the phases that the Claimant managed to secure were enough to warrant a ‘costs in the case’ order.
Claimants should take note of the warning that the courts will look at budgeting as a whole and decide whether an unrealistic budget should warrant departure from the usual ‘costs in the case’ order.
How can PIC assist?
PIC are experts in costs budgeting and negotiations. We help hundreds of Claimants agree budgets which are realistic and reflect the work to be undertaken based on the historic data and work already incurred. PIC ensure that the budgeting process supports the Claimant’s case management plan, rather than undermine it. Get in touch today to see how we can help you to help your clients.
Susie Power, Senior Costs Consultant & Team Leader
15.05.2025