Damages for lost profits of a new or unestablished business may be recoverable upon proper proof. A party shall not be deemed to have failed to prove lost profits because the new or unestablished business has no history of profits. Such damages for a new or unestablished business shall not be recoverable in wrongful death or personal injury actions other than actions for defamation.
§ 8.01-221.1.Unestablished business damages; lost profits.
Chapter 3. Actions · Article 21. Miscellaneous Provisions · Last amended 2002 · Last verified July 16, 2026
In one sentenceSection 8.01-221.1 allows a new or unestablished business to recover lost-profits damages upon proper proof, even without a track record of past profits, but bars that kind of damages claim in wrongful-death or personal-injury cases except for defamation actions.
Full Text of § 8.01-221.1
Plain-English Summary
Courts have historically been wary of lost-profits claims from businesses without an operating history, on the theory that predicting the profits of a venture that never got off the ground is too speculative. This section rejects a strict version of that skepticism: a new or unestablished business can recover lost profits if it offers proper proof, and the mere fact that it lacks a history of past profits is not, by itself, a reason to reject the claim.
The section draws a line around where this kind of damages theory is available. It is off-limits in wrongful-death and personal-injury cases generally — a plaintiff in an ordinary injury or death case cannot use a speculative new-business-profits theory to boost damages — with one carve-out: defamation actions, where lost profits of a new or unestablished business remain recoverable.
Frequently Asked Questions
Can a new business that has never turned a profit recover lost profits in a lawsuit?
Yes, if it offers proper proof. Section 8.01-221.1 says a party is not deemed to have failed to prove lost profits merely because the business has no history of profits.
Does this section apply to personal injury lawsuits?
No, with one exception. The statute bars this kind of new-business lost-profits damages theory in wrongful-death and personal-injury actions, except for defamation actions.
Why does defamation get treated differently from other personal-injury-type claims?
The statute carves defamation out of the general bar, allowing a defamed new or unestablished business to pursue lost-profits damages even though that theory is otherwise unavailable in personal-injury and wrongful-death cases.
What does “proper proof” mean for a new business’s lost profits?
The statute does not define the standard itself; it removes the automatic bar tied to lacking a profit history, leaving the plaintiff to establish lost profits through competent evidence under ordinary damages principles.
Does this section guarantee a new business will win a lost-profits claim?
No. It removes one obstacle — the absence of a profit history — but the business still has to prove its damages with adequate evidence like any other damages claim.
Amendment History
2002, c. 624.
Source & verification. Section text and amendment history are
reproduced verbatim from the Code of Virginia, published by the
Code of Virginia, Virginia Division of Legislative Automated Systems. Last verified July 16, 2026.
· Official source
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