Profit warning – when is loss of profit too remote to recover?

Liability clauses – can't live with them, can't live without them. But as time, and practice, goes on, they become more and more complex. So, it is becoming increasingly important to explain the likely interpretations of the phrases used.

Loss of profits is a key example. What exactly is loss of profits? Is it a direct or indirect loss?

The shipping case of Transfield Shipping Inc v Mercator Shipping Inc [2008] UKHL 48 goes back to some key questions in relation to what losses can be recovered under the head of loss of profit. While it is specific in many ways to its industry, the approaches taken by the House of Lords and the Court of Appeal before it give a useful insight into how this phrase can be interpreted.

Wragge & Co's experts provide a detailed look at the case in an analysis.