Post Aerospace, companies can recover the costs of managing a crisis. James Levy reports
If one company breaches its obligations to another, the innocent company will often have to reorganise its internal resources and divert staff away from their usual duties to help manage and mitigate the effect of the breach.
Until recently, the law has not provided a clear answer about whether or not the ‘wasted’ internal losses that the company suffers because of the diversion are properly recoverable. However, the recent Court of Appeal decision in Aerospace Publishing Ltd v Thames Water Utilities Ltd [2007] EWCA Civ 3, [2007] All ER (D) 02 (Jan) provides a steer about the circumstances in which wasted internal costs may be recovered.
Facts
In the summer of 2001, Aerospace’s premises were flooded as a result of a burst water main belonging to Thames Water. As part of its claim for damages, Aerospace sought to recover money paid to its staff for work necessarily carried out by them as
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