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Independent quantification of lost profits, diminution in value and lost opportunity for commercial disputes in the New South Wales courts, built on a counterfactual the other side cannot easily take apart.
Indicative valuations from A$799. Certified Summary and Detailed reports from seven business days.
An economic loss assessment in Sydney compares what a business would have earned but for the conduct complained of with what it actually earned, using evidence created before the dispute to build the counterfactual. The expert quantifies loss on the causation and legal assumptions counsel instructs, distinguishes lost profit from lost revenue, addresses mitigation and presents a range the Court can test.
Commercial disputes are argued in two halves. Liability asks whether the defendant did something wrong. Quantum asks what that wrong cost. Most of the settlement discussions we see in Sydney turn on the second question, because a claim with clear liability and an inflated or unsupported figure is easy to resist, while a modest claim with a tight, evidenced counterfactual is hard to ignore.
The counterfactual is the whole exercise. The actual position of the business is usually sitting in the accounts. What would have happened without the breach, the misleading conduct or the departed employee has to be constructed, and that construction is where the argument lives. It must fit the case as pleaded, be realistic about the market and the claimant's own capacity, and trace back to evidence that existed before anyone was in dispute.
Quantifying loss has more in common with valuing a business than with auditing one. You need to know where the earnings come from, what moves them, and what would have moved them in the world where the breach never happened. That is why the discipline used to value a business for a sale or a shareholder dispute is the right one to measure the damage done to it.
We prepare quantum reports for claimants and respondents in proceedings before the Supreme Court and District Court of New South Wales and the Federal Court, review the opposing expert's report in a consulting capacity, and take part in expert conferences, joint reports and concurrent evidence.
A certified valuer will listen to your situation and answer any questions you may have, at no cost.
Causation is a legal question. The expert does not decide whether the conduct caused the loss. The expert quantifies the loss on stated assumptions about causation, and where those assumptions are contested the better report quantifies under each alternative, so that counsel is not left exposed if the Court prefers a different causal path.
Budgets, forecasts and board papers prepared before anything went wrong are the most persuasive foundation, because they show what the business itself expected when it had no interest in the answer. Historical accounts, management reports, customer and contract-level revenue and industry data complete the picture.
If the model assumes a breach, a timing or a chain of cause and effect that differs from what has actually been alleged, no amount of careful arithmetic will save it. The expert works from the pleadings and the instructions, and says so in the report.
Assumed extra revenue usually needs staff, premises, stock or capital the business did not have. A counterfactual that ignores those constraints, or the competitive response, overstates the loss and is the first thing an opposing expert will test.
Where the future that the breach displaced is uncertain, the report presents scenarios and a range with the drivers identified, so each assumption can be tested by itself and the conclusion does not collapse if one of them is rejected.
Reports for the Supreme Court and District Court of New South Wales must comply with the Expert Witness Code of Conduct in Schedule 7 of the Uniform Civil Procedure Rules 2005 (NSW), and reports for the Federal Court with its expert evidence practice note. In substance both require an overriding duty to the Court, disclosure of the instructions, facts and assumptions relied on, reasoning that can be followed, and a clear statement of any limitation. We prepare every quantum report to that standard whether or not it is ultimately filed.
Which measure of loss is available depends on the cause of action and is a matter for counsel. The expert's task is to apply the instructed measure correctly and to make every step of the arithmetic visible.
Expectation loss is the profit the claimant would have made had the contract been performed, and is the usual measure in contract claims. Reliance loss is money spent in reliance on the conduct and now wasted; it is easier to evidence and sometimes the better route where counterfactual profit is too speculative. Diminution in value is the shortfall between an asset's actual worth and the worth it would have had if the breach had not occurred. It is typical of warranty claims after a business sale, where the business is valued twice as at the day it was bought, once as represented and once as it really was, on one method and one set of market assumptions.
Loss of a commercial opportunity has two parts, the value of the opportunity had it come off and the probability that it would have, and both need evidence such as tender records and historical win rates. Business interruption turns on whether revenue was lost or merely pushed back, and on whether the disruption caused lasting damage to customer relationships that has to be measured separately. Restraint of trade claims require the loss to be attributed to the breach rather than to customers who would have left anyway, and to run only for the period the restraint would have protected the business.
The weaknesses a reviewing expert finds first, and the cheapest ones to fix before the report is served.
A quantum report is written to be served, tested by an opposing expert and, if the matter runs, examined in the witness box, so the Detailed report is the usual instrument. Earlier in a dispute, a party often needs a private view of the likely range before deciding whether to sue, defend or settle.
The report sets out the instructions, the causal assumptions, the measure of loss applied and the documents examined. It builds the counterfactual step by step from identified evidence, sets each assumption apart so it can be examined individually, explains the costing of the lost revenue, addresses capacity and mitigation in the body, checks explicitly for double counting and presents the conclusion as a range with the drivers identified. Limitations and gaps in the evidence are stated where the reader will see them, not tucked into an appendix.
The certified valuer who signs the report will confer with the opposing expert, prepare the joint report identifying what is agreed and what is not, and give evidence, including concurrently with the other expert, when the matter runs. Where you are the respondent, the same work in reverse, a review of the claimant's report that identifies the unsupported assumptions and the questions worth putting, is frequently the most cost-effective engagement available, because an inflated claim often unravels on its own arithmetic.
Which assumption in this counterfactual, if the Court rejects it, does the most damage to the figure, and does the report survive without it? A quantum report that cannot answer that has not isolated its assumptions.
Talk your situation through with a certified valuer before you commit to anything, at no cost.