Background

FRP was instructed as accounting expert on behalf of a national logistics firm defending a loss of profits claim brought by a provider of temporary HGV drivers. The claimant asserted a breach of contract in respect of an alleged exclusive agency agreement for the supply of drivers. The claimant estimated that as a result of the breach of contract, it suffered lost profits and wasted expenditure.

Action

Our Forensic Services team prepared an expert forensic accounting report assessing the level of damages arising from the alleged breach of contract, including lost profits and wasted expenditure. In respect of lost profits, we identified several areas where we considered the claimant had overstated its loss. We prepared a lost profit model highlighting the key assumptions and profit drivers, and were able to easily flex this to show the impact of changing the assumptions.

Following a meeting of experts, we were able to reduce the areas of disagreement to a handful of key issues in order to assist the court. In respect of wasted expenditure, we identified several errors and inconsistencies in the claimant’s calculation on which our instructing solicitors were able to cross-examine the key witness.

Outcome

The case proceeded to trial, where the judge found that no agreement had existed between the parties and therefore no breach of contract had occurred. In particular, the judge found that the claimant’s evidence was not credible. The claimant was awarded minimal damages and was ordered to pay 95% of the defendant’s costs.