Assessment of loss and loss of profit
We estimate losses and recover loss of profit
In recovering losses, reasoned calculation is the main component of the success of the case. This is particularly true if the plaintiff intends to return not only the obvious damage, but also the additional, future costs, loss of profit.
The courts are reluctant to recover loss of profit since its calculation is usually considered hypothetical and approximate. But we know how to convince the strictest judge that these amounts are no less real than any other loss.
A classic way of calculating loss of profit
How do most professionals do when you need to calculate loss of profit? The potential income that the victim could have obtained had his right not been violated and deducted from him the potential costs associated with income generation are calculated.
The opponent has objections, and the court has questions:
- Did the defendant’s wrongful act have caused the plaintiff’s losses, or could they have other reasons?
- Did the plaintiff take all possible measures to reduce losses (mitigation) or did not act in the calculation of maximum compensation from the defendant?
- How has the amount of losses changed from the moment they were inflicted before the court because of inflation?
Our way of calculating loss of profit
The strategy of our experts is to answer these and other questions before anyone can ask them. That's what we do.
- Using the company’s internal sources, we model the situation and expect the potential income that could be generated if it had not occurred to an adverse event.
- We share the costs associated with income generation into savings and actually incurred. Only the real savings are deducted from potential income.
- The model built is valid by external sources, which show the situation in the market and in the industry.
- We estimate the income received or possible from the mitigation to reduce the amount of loss of profit.
- We assess the causal relationship between the violation of the claimant’s right and the loss of profit. Turning the economic component of this connection into a calculation factor.
- We give the amount of loss of profit by the current date using the accumulation rate or the discount rate.
ABOUT OUR WAYS, IN BOOK
Prevention of loss of profit: Practice and features of calculation
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Why does that work?
Because we take the initiative. Our main task is to make the calculation which the court will take as evidence and will make a decision in favour of our client.
- We participate in the pre-trial process. We agree on the task, help to formulate questions that cover all elements of evidence.
- We actively defend our conclusions. Strengthen the client’s position by positive review of the pre-trial detention or the conclusion of the SRO on the evaluation report.
- We prepare an economic opinion, in which we expect all types of losses incurred by the client, we draw it up as profitable and visually as possible for opponents and trials.
- In the case of forensic appointment, we verify the candidates of experts proposed by the opponents, the results are submitted to the court. We are developing questions for the designated expert.
- We are negotiating with the opponent to settle the dispute before trial. If negotiations do not bring the expected outcome, we develop a strategy with lawyers and go to court.
- If the result of the expertise is not in the interests of the client, it is actively challenged: we use the expert opinion poll by a lawyer and a narrow expert, analysis, review.
In most cases, the dispute is resolved without forensic examination, based on pre-trial data. Less often, such a conclusion becomes a reason to appoint forensic examination.
We will help either party at the right stage
Although the burden of proof in the recovery of loss of profit rests primarily on the plaintiff, this does not prevent the defendant from taking an active position. He has the opportunity to reduce the amount of recovery or win the dispute by ordering an economic opinion which will show:
- that the claimant’s losses are not or only partly a consequence of the defendant’s misconduct;
- the claimant did not take the necessary measures to mitigate the amount of losses.
If the defendant’s process is accompanied by a specialist, he will analyse the plaintiff’s opinion and find mistakes. For example, note if the plaintiff has included VAT in the amount of recovery, although it may be returned as a tax deduction. The validity of the calculation through a review of the conclusion can be completely denied.
An example of the calculation of loss of profit
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