ZENITH LOGISTICS SERVICES (UK) LTD AND OTHERS V KEATES AND OTHERS [2022] EWHC 1496 (COMM)

HEADLINE SUMMARY

The High Court has held that damages will not be awarded for wasted time management, unless the claim is accurately quantified and substantiated by evidence.

COMMENTARY

The decision shows that although the court will be prepared to adopt a relatively broad brush approach, it requires evidence to prove properly recoverable loss. Failure to provide evidence will be fatal to a claim for management time,  with no second chance to prove it. 

FACTUAL BACKGROUND AND DECISION

This main claim was for damage caused to the claimant group (Cs) for misappropriation of assets and unlawful means conspiracy.

Cs also claimed £281,500 damages for wasted management time spent investigating the wrongdoing complained of. The sum comprised six individuals' time.  The main element was attributed to Mr Liddell who estimated he had spent 1,000 hours at £250 per hour on commissioning and overseeing investigations into the wrongdoing. Other employees had also spent considerable time in dealing with the matter which C said could otherwise have been devoted to profit earning-work.

The figures and the hourly rates charged in respect of all individuals were estimates, without any supporting documentary evidence, such as contemporaneous time-sheets or diary entries. The witness statements on their own were deemed insufficient evidence.

The Judge decided to make no award of damages for management time, in the absence of any evidence on which he could make an accurate assessment.

KEY LEGAL POINTS

The decision underlines that any monetary loss needs to be proven by evidence otherwise damages will not be awarded at the court's discretion.  

It serves as a reminder, when working on claims which absorb a considerable amount of the parties' management time, to put systems in place to record the actual time spent on a matter, so the court has evidence on the basis of which it can make an award of damages.

Key contact

Olivia Lowe