HT-2023-BHM-000003 - [2024] EWHC 1089 (TCC)

The Claimant claims £279,675 by way of lost profit, being 20% of the contract price of the Contract, on the basis that its expected profit from the contract was 20%. The parties agreed at the CCMC that, in the absence of any pleaded case on the part of the Defendant as to an alternative basis for calculation of the profit, no expert evidence was needed as to the appropriate level of profit, although the Defendant put the Claimant to proof of its loss. The Defendant argues that, in the absence of detailed evidence as to the Claimant’s likely costs to perform the contract, the Claimant has failed to prove its lost profit. The Claimant’s evidence is that it built a 20% profit margin into its price. In addition, I note that the contract price for the contract with the contractor who replaced the Claimant and build the houses was considerably lower than the price under the Contract. The Claimant’s price was £1,398,375. The replacement contractor’s price was £1,179,456. Mr Bajwa confirmed in his oral evidence that it was for the same work. The replacement contractor’s price for the same work was nearly 16% lower than the Claimant’s price. Knowing that the replacement contractor was able to do the same work so substantially more cheaply, I do not have any difficulty in accepting the Claimant’s evidence that it had a 20% profit margin in its price. Further, there is no evidence before me that a 20% profit is excessive for a contract of this type. The only evidence I have as to the likely actual loss profit is that of the Claimant, which is that it expected to make a 20% profit from the Contract. I accept that evidence and will award that sum to the Claimant, being £279,675.