A business loses money not only when something is destroyed or damaged. Often the biggest losses are the profit a company should have earned but did not — because its rights were infringed, or because of the actions of counterparties or public authorities. The law calls this loss of profit, and it can be recovered — provided its amount is credibly substantiated.
The Kanzas company performs loss of profit valuations under Article 22 of the Civil Code of Ukraine: loss of profit is the income a person could realistically have earned under ordinary circumstances had their right not been infringed.
Typical grounds for recovering loss of profit
- unlawful use of a trademark — a competitor profits from your brand while you lose sales;
- delayed issuance of permits by public authorities — the business stands idle, income stops;
- unlawful revocation of licences — operations halted through the state's fault;
- bad-faith actions of partners — disrupted supplies, blocked operations, breach of contractual obligations;
- delayed VAT refunds — funds frozen by the state are not working for the business.
A telling illustration from practice: municipal authorities unlawfully dismantled the barrier of a company operating paid parking — and the business earned no revenue for several months. The losses ran into millions of hryvnias, and it is precisely such situations that loss of profit valuation addresses.
Another case from our practice: for a metallurgical enterprise we calculated the loss of profit from funds idled by delayed VAT refunds — the damages ran into tens of millions of hryvnias.
How loss of profit is calculated
The core challenge of this valuation is evidentiary strength. Courts award claims only when the calculation withstands scrutiny: a proven causal link between the infringement and the losses, a substantiated income forecast, sound assumptions. We therefore:
- analyse the business "before" the infringement — actual income, dynamics, seasonality;
- build a substantiated "but-for" forecast — as if the right had not been infringed;
- compare it with the actual result and determine the foregone profit;
- document every assumption so that it withstands the opponent's objections.
Evidence and documents
Financial statements and management accounts, contracts and correspondence with counterparties, documents evidencing the infringement (authorities' decisions, reports, claims), industry market data.
Deliverable
A loss of profit valuation report — an argument for court, negotiations or pre-action correspondence. Where needed, we support the report with explanations and responses to objections. 20+ years of experience.
Recovering loss of profit is a contest won by the side with the better-substantiated numbers. We offer a rigorous, evidence-driven calculation, realistic timelines and an individual approach to the circumstances of your case. Email or message us — we will assess the prospects before the work even begins.
War-related loss of profit — business interruption caused by property destruction — is calculated under a separate methodology: see «Loss of Profit Valuation Due to War».
FAQ
Can loss of profit be recovered without going to court? Yes — a well-substantiated report often works at the claim or negotiation stage.
What period can be covered? The period for which the causal link between the infringement and the losses is proven.
What if the business is young with little income history? Market comparables and industry data are used — with substantiation.
