Page 28 - Calculating Lost Profits

Chapter 5

Loss Period

Overview

One early consideration when analyzing lost profits is the applicable loss period associated with the
wrongful act. Simplistically, the loss period is the time over which lost profits (or damages, more gener-
ally) have occurred or are expected to occur because of the wrongful act. Typically, the loss period

 begins on the date the wrongful act occurred and

 ends when the plaintiff is no longer earning or able to earn fewer profits than would have been
earned but for the wrongful act.

As with other components of lost profits analyses, determining the appropriate loss period may not be a
simple matter. Loss period start dates may be the subject of dispute between the parties, for example,
due to differing views regarding when the wrongdoing or breach occurred or regarding the agreement it-
self. Items and information that may be relevant in determining the start of the loss period may include
the following:

 The date of any breach or wrongful act

 The date that the alleged injury was sustained

 The start date of a contract

 The delivery date specified in a relevant contract

 The date of the issuance of a relevant patent or relevant patents

 Court filings, such as pleadings, answers, and rulings by the court

 Interrogatory responses, deposition testimony, or admissions

 Laches fn 1 and statute of limitations issues

 Case law specific to the case’s jurisdiction

 Discussions with the client and counsel

fn 1 Laches is defined as "the equitable doctrine by which a court denies relief to a claimant who has unreasonably delayed in assert-
ing the claim, when that delay has prejudiced the party against whom relief is sought." Bryan A. Garner, Black’s Law Dictionary,
Tenth Edition (2014), West Publishing Co., Thomas Reuters, United States of America, p. 1009.

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