ABSTRACT
The law leans against the recovery of lost profits as damages in tort. This is a matter of policy based upon the enormous and potentially unsustainable losses that might otherwise be imposed upon tortfeasors. Loss of profits is therefore generally only recoverable to a very limited extent in the tort of negligence. Very often claims are advanced for what are referred to as "consequential" or "indirect" losses such as loss of profits, overheads or management costs. Claims for recovery of overheads are frequently made as part of a claim by a contractor for compensation for delays allegedly caused by, or contractually the responsibility of, the employer. Whether the employer will know the amount charged for overheads and profit will depend upon the contract. If the contractor quotes a single lump sum for the work, the employer will usually have no means of knowing what is charged for either element.
