Court of Appeal sets guidelines for wasted staff time damages claims

05 March 2007

Graham Smith

The Court of Appeal has set out guidelines on what a claimant has to establish in order to prove a claim for diverted staff time. This is significant for IT project disputes, where claims for wasted staff time are common.

The case is Aerospace Publishing Ltd and Another v Thames Water Utilities Ltd [2007] EWCA Civ 3. Wilson LJ, giving the judgment of the court on this point, concluded that:

  1. The fact and, if so, the extent of the diversion of staff time have to be properly established and, if in that regard evidence which it would have been reasonable for the claimant to adduce is not adduced, he is at risk of a finding that they have not been established.

  2. The claimant also has to establish that the diversion caused significant disruption to its business.

  3. Even though it may well be that strictly the claim should be cast in terms of a loss of revenue attributable to the diversion of staff time, nevertheless in the ordinary case, and unless the defendant can establish the contrary, it is reasonable for the court to infer from the disruption that, had their time not been thus diverted, staff would have applied it to activities which would, directly or indirectly, have generated revenue for the claimant in an amount at least equal to the costs of employing them during that time.

This provides helpful clarification. However, the suggestion that a claim for diverted staff time is, strictly speaking, a claim for loss of revenue, may render it vulnerable to some contractual exclusion clauses.