Loss of profit (lucrum cessans)

Loss of profit under the lucrum cessans doctrine refers to future profits lost as a consequence of the harmful event (breach of contract, unfair competition, wrongful termination of a commercial relationship): the prospective dimension of economic damages, as opposed to damnum emergens, the actual past losses already incurred. In both French law (manque à gagner) and Swiss law, lucrum cessans is a recognised head of recoverable damages provided it is sufficiently certain and directly caused by the wrongful act. It is distinct from loss of chance in that it applies when profit generation was certain or near-certain rather than merely probable. Its quantification requires forward-looking financial modelling using the but-for method: projecting the financial performance that would have occurred in the absence of the harmful event, typically through DCF-based projections of the lost revenue stream, discounted to present value at the appropriate risk-adjusted rate.

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Example: a Swiss distribution company loses a 5-year exclusive contract due to wrongful termination. Hectelion quantifies the lucrum cessans as the present value of 5 years of lost net margins: CHF 480,000 annual net contribution, discounted at the company's WACC of 9.5%. Present value: CHF 1.85 million, added to damnum emergens of CHF 340,000 for a total claim of CHF 2.19 million, supported by a formal expert report submitted to the arbitral tribunal. In a comparable case over a 3-year horizon, lost revenues of CHF 4.8 million at a 35% gross margin represent a CHF 1.68 million gross profit loss; after deducting saved variable costs of CHF 280,000, the net loss of profit amounts to CHF 1.4 million, benchmarked against the distributor's historical performance on equivalent contracts.

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Hectelion quantifies loss of profit and lucrum cessans in commercial litigation and arbitration proceedings across French and Swiss jurisdictions, building rigorous but-for and DCF models that withstand judicial and arbitral scrutiny.