Practical and Ethical Problems in Damage Evaluation and Claim

This technical note briefly discusses some fundamental issues related to damage evaluation and claims, introducing some important practical and ethical problems associated with this topic. This issue is becoming increasingly important for managers and decision makers around the world for at least three reasons. First, globalization and increased technological and operational complexity increase the exposure of companies to material and immaterial damages. Thus, managers often have to deal with the quantification of damages in the context of trials, arbitration and out-of-court settlements. Second, the legislation of European and North American countries are progressively increasing the liability of top managers for the eventual damages caused by their decisions to the company and to critical stakeholders such as customers, suppliers and partners. Third, the spread of consumers' associations and the even more frequent use of class actions are increasing the amount of legal proceedings against companies.