HERE we examine the much asked question of ‘can I claim for lost management time?’
Businesses, when faced with a breach of contract situation tend to pull out all the stops to fix the problem before making a claim. Every management role has a degree of problem solving, but hours and days can be lost limiting the impact of another party’s failing. Only when the smoke clears do you think ‘what has this cost’ in time and profit.
Put simply – it depends.
Do not duplicate a claim for profit
You cannot claim for lost profit and lost management time where they relate to the same loss (the expectation loss and the reliance loss) and you have to choose: claim for lost profits or the cost incurred.
Claim-related costs are not damages
Costs incurred in collating evidence and preparing submissions or witness statements for legal proceedings cannot be claimed as wasted management costs, instead they should be claimed as part of the costs of bringing the claim.
The test
Managers are expected to deal with crisis management – the test is whether staff have been ‘significantly diverted from their usual activities’: if so their time can be claimed (at cost).
Evidence is crucial so contact with your solicitor early, who can advise you on:
* Looking at any contractual notice requirements that apply to making claims (such as in construction contracts)
* The keeping of detailed records of where personnel have been diverted from their usual work activities to investigate, manage or limit the impact of the breach.
* Including
o description of breach
o time/dates records
o description of the work
o notes as to why that person or persons were used
o notes as to what they would have otherwise been doing
o record the disruption to the business
o explain why external staff were not recruited
Wasted management claims can be open to attack from a retrospective analysis so the more information that you can put forward in support, the better the chance of recovery.
Kevin Rogers is the Chairman of Wilson Browne Solicitors, a former NLS Solicitor of the Year and recognised by the Legal 500 as an expert in his field. The team deal with a wide range of business disputes for businesses of all sizes, and aim to give clear, commercial advice every time. Kevin can be reached at or 01536 410014.
