Fannon and Dunitz on preparing and defending lost profits calculations

BVWireIssue #98-1
November 2, 2010

During last week’s BVR teleconference “Legal Contexts of Lost Profits Damages and Case Law Update,” Nancy Fannon (Fannon Valuation Group) and Jonathan Dunitz (Friedman Gaythwaite Wolf & Leavitt) discussed how necessary it is to understand lost profits claims and their context across varying legal theories in order to prepare and defend lost profits calculations.

Of the many points the two experts shared, one was how the party seeking an award of lost profits must show three things:

  • That the lost profit damages were caused by the conduct upon which the claim is based.  Proximate cause requires that the plaintiff tie damages to the wrongful act. “Failure to tie the loss calculation to the wrongful act is a common reason for expert exclusion,” explained Fannon.
  • That the parties contemplated the possibility of lost profit damages, or that the lost profit damages were a foreseeable consequence of the conduct. “Foreseeability requires that the losses resulting from a breach of contract, a tort, or other actionable conduct are foreseeable and probable,” Fannon added.
  • That the lost profit damages are capable of proof with reasonable certainty.This rule recognizes that lost profits damages “cannot be calculated with absolute exactness,” says Dunitz.

For more information on this webinar click here.

Please let us know if you have any comments about this article or enhancements you would like to see.