- 29 Aug 2023
- •
- 2 min read
Can I claim for wasted management time in a dispute?
One of the biggest frustrations caused by disputes is the wasted management time caused to businesses. Whether that involves chasing unpaid invoices, investigating the issues, or remedying another party’s wrongdoing – the hours can easily mount up.
This is time which could otherwise be used to build and progress a business, and many businesses wonder whether they can claim for loss of profit caused by these wasted hours.
Can you claim for your wasted management time in dealing with another party’s breach of contract or wrongdoing?
A recent High Court case of Zenith Logistics Services (UK) Ltd and others v Keates and Others [2022] EWHC 1496 (Comm) provided a useful summary of the court’s approach.
Wasted management costs which cause disruption to a business as a result of another party’s wrongdoing (for example a breach of contract claim) can potentially be claimed – but only if you provide supporting evidence and can quantify the loss caused to the business as a result of the wasted management time.
In the Zenith case, the Judge declined to make any award for claim for wasted management time due to the party not fully quantifying their claim or providing supporting evidence. In particular, the Judge was critical of:
- No explanation or calculation was provided for the hourly rates claimed
- No timesheets or diaries had been used to record the wasted time. The estimated hours were, in the Judge’s words, an “impressionistic estimate”
- There was no compelling evidence that the wasted time of more junior staff would have been disruptive to the business
The take home point for businesses is that a clear record of wasted management time should be kept from the outset of a dispute – identifying the staff member involved, what they were doing, and how much time was spent. The message from the Court is that whilst a calculation of wasted management time does not need to be perfect, it does need to be capable of being quantified and evidenced in a rational and principled way. Businesses may also wish to keep a record of any direct disruption caused to the business, for example lost customer orders.
The Commercial Litigation team at Trethowans are experts in guiding businesses through disputes. For further details, contact the team on 023 8032 1000.
