21 Sep I have suffered an economic damage, shall I claim the loss of profit that has caused me?
I have suffered an economic damage, can I claim the loss of profit that has caused me?
For loss of profit, we mean the gain that is left or will be lost by one person, due to the non-fulfillment, illicit or damage caused by another.
At the same time within the concept of profit are included not only what would imply a capital increase but also a decrease of expenses that would be hypothetical without that non-fulfillment.
It is necessary to distinguish the loss of profits from emerging damages, easily confused concepts.
The emerging damage would amount to the value or price of a thing or property that has suffered the damage.For example, if a company produces a fire the emerging damage would be the loss of value due to the destruction of machines, facilities, etc. And the loss of profit would be determined by the profit that could reasonably be obtained from developing ordinary activity.
Situations that can generate loss of profit.
Apart from the situations of traffic accidents, fires and other unforeseeable events where the insurance contracted for this purpose come into play, in the civil or commercial contractual plane any type of non-compliance is liable to generate damages that include emergent damage and loss of profit.
Thus, the general provision of the Civil Code -art.1.101- states that ” are subject to compensation for damages caused those who in the fulfillment of their obligations incur in intent, negligence or delinquency, and those who in any way contravene to the tenor of those. “
And in turn, this compensation for damages according to art.1106 includes “not only the value of the loss they have suffered (emergent damage), but also the gain that the creditor has failed to obtain” (loss of profit ).
Breach of contracts and obligations for fraud, breaching, both intentional or negligent, are, for example, the delay in the payment of a debt, or delay in the delivery of objects, breach of exceptional obligations which only can be fulfilled by the debtor, and in a multitude of relations: contracts of lease, of work, supply, antitrust law, industrial property, intellectual, etc.
Claim and proof of loss of profit
If we have suffered a loss and want to claim for these concepts we have to be aware that the case law will require us to prove the damages, so we have to take into account the following aspects: –
Burden of proof: It is usually the injured party, in this case the plaintiff, who has to prove the damages. It is not enough with baseless assertions or mere expectations or hypotheses. In this sense, the Supreme Court is not flexible and requires the quantification of loss of profit and a reasonable proof that in the future and in case there has not been breach of default or prejudice those gains would have been obtained. –
Damage “in re ipsa” or cases in which the mere non-fulfillment itself generates the emergent damage and loss of profit: The courts have also established this criterion as an exception to the general rule, especially in cases of illicit intellectual or industrial property, and unfair competition. In these cases, the execution in the market of acts of imitation, confusion, exploitation of others reputation, non-compliance with the exclusive exercise of patents and trademarks, it is considered that the infringer’s own action creates a disturbance in the market so it is not necessary to prove the suffered damage. It is the doctrine of harm in re ipsa, or in the thing itself. – However, the most recent rulings refuse to extend the scope of this doctrine to other assumptions such as non-compliance with delays in the delivery of housing, where proof is still necessary. –
Different kind of evidences: Since judges and courts are rigid in assessing loss of profit and do not accept mere expectations, the petition must be based on the usual means of evidence that operate in the economic world such as accounting, financial, actuarial techniques, tax returns, etc., or by technical reports from auditors or experts in the field, to justify the “quantum” of loss of profits. If you have suffered damage or injury, derived from any type of legal relationship or event, request specialized advice to claim damages and lost profits. Do not hesitate to contact us.