The recent decision in the case Bridge UK Com v Abbey Pynford affirms the principle that courts are willing to allow claims for management time, especially when they are fully documented.
Litigation often involves a considerable amount of management time, which takes key staff away from the every day activities of running your business. Consequently, management time spent on litigation can result in a direct and measurable financial loss.
In principle, the courts are willing to compensate businesses for lost management time. In the Bridge UK case, Bridge UK, a commercial printer, moved its premises. As part of the move, they employed Abbey Pynford to install foundations at the new premises. The foundations were required to take the weight of a sixty two ton printing press. However, it was discovered, shortly after the installation of the foundations, that they were defective. The press could not therefore be installed. After a number of attempts at remedial works, the problem was solved and the press was eventually installed. However, Bridge UK claimed losses resulting from the defective foundations of just over £80,000, including £7,680 for lost management time.
The claim for lost management time was based upon Bridge UK’s own assessment of its loss and was made retrospectively. It was therefore attacked by Abbey Pynford on the basis that it was not properly recorded and supported (and could not therefore be proven). Nevertheless, the court allowed the claim for management time on the basis that a reconstruction from memory was an acceptable form of evidence of lost management time. However, it reduced the claim by approximately 20% due to the fact that there were no contemporaneous supporting records.
The Bridge UK case makes it clear that parties involved in litigation can claim compensation for lost management time. However, unless it is recorded, it may be difficult to prove the loss, or the claim may be reduced considerably. Consequently, whilst it may seem time consuming, keeping proper notes of time spent by key staff in the litigation will help you demonstrate your loss and thus maximise the recovery of your losses.