The decision of the Court of Appeal in Aerospace Publishing Ltd -v- Thames Water Utilities Ltd [2007] EWCA Civ 3 has provided helpful clarification as to the recoverability of the costs of management and staff time in litigation and the requirements to be met to do so. Key requirements to be proved are that a) staff had been diverted from their normal activities in order to deal with the consequences of negligence and similar and b) such diversion caused significant disruption to the business.

The court ruled that it may reasonably be inferred that had their time not been so diverted, staff would have been engaged on activities which would, directly or indirectly, have generated revenue in a sum at least equal to the costs of employing them during that time. In the absence of records, evidence in the form of a reconstruction from memory may be acceptable although a discount (of 20%) was given by the court to allow for inaccurate recollection of events.

Posted: July 4th, 2007 under Dispute Management.
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