Dispute Exposure Estimate Calculator

Work out dispute exposure estimate instantly with clear inputs, formula shown and shareable results.

About Dispute Exposure Estimate Calculator

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.

Formulas

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 %

Worked example

With the default values below, Dispute Exposure Estimate Calculator returns Expected total exposure of $12,288,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Value in dispute: 24,000,000
Probability of an adverse outcome: 40
Legal and expert costs: 4,200,000
Costs recovered if you succeed: 60

Results

Expected total exposure: $12,288,000.00
Probability-weighted adverse award: $9,600,000.00
Expected net legal cost: $2,688,000.00
Worst-case exposure: $30,720,000.00

Step by step

1Values used
2Expected adverse award
3Expected net legal cost
4Expected total exposure= 12,288,000.00
5Probability-weighted adverse award= 9,600,000.00
6Expected net legal cost= 2,688,000.00
7Worst-case exposure= 30,720,000.00

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
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.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

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.

Frequently Asked Questions

Which figure should be provisioned?

Accounting standards generally require the best estimate where an outflow is probable, with the worst case disclosed as a contingent liability.

Why does cost recovery matter?

Because in costs-follow-the-event jurisdictions winning recovers a substantial share of your spend, which materially changes the economics of defending.