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X. Recovery of Investigative Costs

In general, costs of protecting one's legal claim or preparing for litigation are unrecoverable as damages. Sisters of Providence in Washington v. A.A. Pain Clinic, Inc., 81 P.3d 989, 1008 (Alaska 2003); Sykes v. Melba Creek Mining, Inc., 952 P.2d 1164, 1172 (Alaska 1998). Thus, overhead costs pertaining to risk management or claims processing are not recoverable because they are similar to expenses incurred in preparing for litigation. Routine administrative overhead costs relating to repair of damages sustained are recoverable if they are a fair and reasonable allocation of actual repair costs, even though the costs are indirect. Golden Valley Elec. Ass'n, Inc. v. Revel, 719 P.2d 263, 264-265 (Alaska 1986); Curt's Trucking Co. v. City of Anchorage, 578 P.2d 975, 979 (Alaska 1978).

There is an exception to this rule, however. While expenses incurred in protecting, developing, or asserting a claim against a party who has inflicted tortious harm are ordinarily not recoverable as damages in an action against the party who inflicted the harm, when the negligent party embroils the injured party in litigation with a third party, the injured party is entitled to recover from the negligent party all costs of the third-party litigation. Power Constructors, Inc. v. Taylor & Hintze, 960 P.2d 20, 40 (Alaska 1998).