Clarity on wasted expenditure exclusions (Soteria (formerly CIS) v IBM)

Table of contents

• What are the practical implications of this case?
• What was the background?
• What did the court decide?
• Case details

Article summary

TMT analysis: A recent judgment of the Court of Appeal clarifies the principles regarding the recovery of wasted expenditure claims. While wasted costs often form part of a subsequent loss of profit claim, the judgment confirms that the two forms of loss are separate and distinct. Consequently, in order to be effective, exclusion clauses must specifically refer to wasted costs. Exclusions in respect of loss of profits claims will not effectively exclude such claims. Written by Jonathan Smart, partner, Phil Tansley, partner, and John Shirley, associate, at Shoosmiths.