QUANTIFYING DAMAGES IN COMMERCIAL DISPUTES
CD: How important is it for a company considering filing a commercial dispute to assess the potential damages thoroughly?
Grantham: Assessing potential damages is incredibly important. Our 2016 Litigation Survey suggests that one in 10 companies have been involved in a ‘bet-the-company’ lawsuit, which is a surprisingly large number. Admittedly, these are the top end of the cases in terms of magnitude, but if a company is considering investing time and cost in bringing a claim of any significant size it needs to know what the likely ‘return’ on that investment would be, and the possible risks associated with it. At an early stage, a high-level view from an experienced expert will be valuable in helping a company with the decision of whether to bring the claim. In addition, this early assessment will assist when it comes to thinking about if and how to consider the involvement of litigation support funders. They will undoubtedly carry out their own assessment and it will assist the company considerably to have its own independent assessment.
Bergin: Assessing damages is quite critical as it can help the filing party assess the viability of taking legal action. We have occasionally seen situations where a party, after filing its claim, decided to drop one or more claims after reviewing the quantum of damages prepared. Having arrived at such an understanding before the claim was filed would have saved the party considerable costs and the potentially embarrassing climb-down. In addition, understanding where the losses arise – the heads of claim – helps focus minds on the evidence that may be required and how complex the case may become. That may also elicit other remedies which may be relevant, injunctions, for example, or where mitigating action should or is being taken.
Jul-Sep 2017 issue