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In Danilina v Chernukhin and others [2018] EWHC 2503 (Comm)
the Commercial Court ordered the claimant to pay further security to three defendants being 75% of incurred and expected costs, as there was a reasonable possibility of indemnity costs being ordered if the claimant lost, accepting the defendants’ argument that if the claimant lost at trial, it was highly likely that she would be ordered to pay indemnity costs, on the basis that she knowingly gave false evidence, as, on the facts, there was no room for mistaken recollection.
In the absence of a possible indemnity costs order, security was generally ordered by reference to 60 to 70% of incurred and expected costs.
This did not involve considering the merits of the claimant’s claims, it assumed she lost them.
The court held that if this happened, it was likely to be because the claimant was dishonest.
The first defendant was also involved in an arbitration with a third party which raised the same issue as one of the claimant’s claims.
The court held that the apportionment of the defendants’ future costs 65% to the claim and 35% to the arbitration was a reasonable possibility, so could be used for the purpose of the security order.
The claimant was unable to establish that her claim would be stifled if she was ordered to pay the level of security sought.
The third party had already provided funds to the claimant and made it clear that he wished her to pursue and win the proceedings.
The claimant’s statement that the third party had not agreed to provide further security was not “full, frank, clear and unequivocal evidence” that he was not willing or able to provide the security sought.
Although the claimant was being asked to provide security at a late stage, two months before trial, this did not justify not making the order, particularly as there was no evidence that providing the security would be burdensome to the third party.
