Work out dispute exposure estimate instantly with clear inputs, formula shown and shareable results.
Dispute exposure combines the probability-weighted adverse award with the expected net legal cost after allowing for partial cost recovery if you succeed. Reporting the worst case alongside the expected value is essential, because provisioning is driven by the tail, not the mean.
Expected adverse award
Expected loss = Value in dispute x Probability of adverse outcome
Expected net legal cost
Net cost = Legal costs - (1 - Probability) x Legal costs x Recovery %
Indicative estimate only. Fees, entitlements, limits and formulas vary by jurisdiction, statute, policy wording and the facts of the case. This is not legal, tax, insurance or financial advice — confirm with a qualified professional or the relevant authority.
Accounting standards generally require the best estimate where an outflow is probable, with the worst case disclosed as a contingent liability.
Because in costs-follow-the-event jurisdictions winning recovers a substantial share of your spend, which materially changes the economics of defending.