Firm wins compensation for executive time wasted in dispute

Bridge is a printer which decided to install a new printer at a new site. It hired specialist ground engineering company Abbey Pynford to lay a new floor in its new premises capable of bearing the weight of the printer.

The construction of the floor suffered a number of setbacks and significant delays, and Bridge sued Abbey Pynford for compensation on a number of counts and took the unusual step of suing for lost management time for one of its executives, Peter Ruck.

If suing for breach of contract a company is entitled to damages under a number of headings. One of these is wasted management time, if it can show that executives were so tied up in the dispute that they could not carry on their usual duties as normal.

Ruck was paid £100,074 a year and the company claimed that he had spent 128 hours dealing with the floor problems. The company claimed a loss of £7,680.

High Court Judge Justice Ramsey accepted Ruck's calculation of the amount of time he had spent dealing with the problem, despite the fact that it was done retrospectively from documents relating to the case and his own records. However, he said that a discount should be applied because the method was not likely to provide exact figures.

"Such a method of retrospective assessment is, I consider, a valid method of calculation," said Ramsey in his judgment. "However, it must be borne in mind that such an assessment is an approximation of the hours spent and may over-estimate or under-estimate the actual time which would have been recorded at the time."

"I consider that a discount should be applied to allow for the inherent uncertainty in this retrospective method. Overall, I consider that a discount of about 20% would be appropriate to allow both for the hours wrongly included for outsourcing to M and M Printing in August 2002 which I have disallowed and for the uncertainty arising from the method. The relevant hours spent by Mr Ruck were, therefore, I find 100 hours," he said.

Ramsey referred to a previous case in which a similar ruling was made. Justice Gloster had written in that case, which involved Risk Insurance and Reinsurance Solutions: "As a matter of principle, such head of loss (i.e. the costs of wasted staff time spent on the investigation and/or mitigation of the tort) is recoverable. However, this is subject to the proviso that it has to be demonstrated with sufficient certainty that the wasted time was indeed spent on investigating and/or mitigating the relevant tort."

"To be able to recover one has to show some significant disruption to the business; in other words that staff have been significantly diverted form their usual activities," said Gloster. "Otherwise the alleged wasted expenditure on wages cannot be said to be "directly attributable" to the tort."

Bridge also claimed a 25% add-on to the wages of Ruck, which it described as the "opportunity cost" of Ruck not performing his normal duties of bringing in new business which would have earned the company profit. Ramsey said that he was "not satisfied that this is recoverable", and only awarded the £4,800 that was calculated to be Ruck's wages for 100 hours' work.