Proximate cause Flashcards
Concept of proximate cause
It is the immediate cause of the damage. When considering proximate cause, you should look at the cause which is proximate in efficiency rather than time.
Active efficient cause that sets a chain of events in motion, i.e it has a direct bearing
Proximate in effect/efficiency over time, not the remote cause.
Ikaria (Leyland Shipping Co v N.U Fire Insurance Societ, 1918)
The vessel was hit by a torpedo sustaining damage. It was towed to a nearby port but due to incoming heavy weather the port authorities ordered the vessel to be taken out to anchor outside the port.
The vessel became waterlogged in the heavy weather and became a total loss. The owners tried to claim for a total loss caused by perils of the seas under cl 6.1.1. However, it was ruled that the proximate cause of the loss was the torpedo strike. The vessel was never out of the grip of peril from the torpedo strike, therefore there was no break in the chain of causation. The war exclusion, cl 23, applied and hence no claim was allowed.
On the other hand, Hamilton v pandorf, in which rats had gnawed through lead pipes. This led to an inlet of water which consequentially damaged the cargo. The cargo’s insurance policy covered damages proximately cause by rats or vermin but did not cover perils of the sea. The owners tried to claim for the loss, claiming the damages were caused by the rats. However, it was ruled that the proximate cause of the loss was in fact water damage. The rats were in fact the remote cause.
Meaning and effect of the term “proximate clause”, MIA 55 (1)
1) Insurer is liable for any loss proximately caused by a peril insured against, but he is not liable for any loss which is not proximately caused by a peril insured against
Excluded losses, MIA 55 (2)
2) In particular
a. The insurer is not liable for any loss attributable to the wilful misconduct of the assured, but, unless the policy otherwise provides, he is liable for any loss proximately caused by a peril insured against, even though the loss would not have happened but for the misconduct or negligence of the master or crew;
b. Unless the policy otherwise provides, the insurer on ship or goods is not liable for any loss proximately caused by delay, although the delay be caused by a peril insured against;
c. Unless the policy otherwise provides, the insurer is not liable for ordinary wear and tear, ordinary leakage and breakage, inherent vice or nature of the subject-matter insured, or for any loss proximately caused by rats or vermin, or for any injury to machinery not proximately caused by maritime perils.
Wadsworth Lighterage (1929)
A barge, insured against total loss, sank at her moorings in fair weather. The owner’s tried to claim for total loss but it was held that the proximate cause of the sinking was wear and tear. The barge, after 50years, had simply come to the end of its life. Such loss is excluded in MIA 55 (2) (general debility of the barge).
Samuel v Dumas (1923)
The vessel was scuttled by the master and crew with the connivance of the owners. The innocent mortgagee tried to make a claim for the loss but was rejected due to the fact there was no fortuity in the incident. (it was no accident, it was a deliberate act in which the owner was privy to).
However, if the owner had not connived with the crew, then the scuttling of the vessel would be a barratrous act, a peril insured against in Cl 6.1. and the mortgagee and owner would be able to make a claim.
Loss proximately caused by the want of due diligence of the assured is also excluded in Cl 6.
Dudgeon v Pembroke [1877]
The assured took out a time policy on an iron steamship while she was in dry-dock at Millwall undergoing an extensive overhaul. The vessel made a ballast passage to Gothenburg, during which she was noted to be making some water. On the return loaded passage to London she encountered heavy weather and became water-logged, eventually grounding and becoming a total loss. It was admitted that the vessel was unseaworthy, but it was also found that the Assured was not privy to this unseaworthiness. The House of Lords held that the Assured were entitled to recover for a loss by sea perils (heavy weather) because a “long course of decisions in the courts of this country have established that causa proxima non remota spectator is the maxim by which these contracts of insurance are to be construed and that any loss caused immediately by the perils of the sea is within the policy, though it would not have occurred but for the concurrent actions of some other cause which is not within it.”
Miss Jay Jay 1987
A fast motor yacht encountered adverse weather on a passage from France to the U.K. On arrival it was found that the hull had been damaged partly as a result of poor design of internal stiffeners and partly because of the adverse weather.
In the High Court it was held that (with regard to Rule of Construction 7) it was not necessary for weather to be exceptionally bad to give rise to a claim arising from perils of the sea. If the action of the sea is the immediate cause of the loss, a claim will still arise even if conditions are within the range that could reasonably be anticipated.
In the Court of Appeal, it was confirmed that where there are two proximate causes of a loss and one is included (adverse weather) and the other is not expressly excluded by the policy (unseaworthiness due to inadequate stiffeners) the claim will succeed.
The B Atlantic
The landmark decision was that of the House of Lords in Leyland Shipping Co v Norwich Union Fire Insurance Society, in which it was conclusively laid down that where a loss is due to a combination of causes, the question which is the proximate cause is not solved by mere order in point of time. In the words of Lord Shaw, “causation is not a chain, but a net … The cause which is truly proximate is that which is proximate in efficiency. That efficiency may have been preserved although other causes may meantime have sprung up which have not destroyed or truly impaired it, and it may culminate in a result of which it still remains the real efficient cause to which the event can be ascribed”.
It may not always be necessary, however, to seek out one factor as the dominant cause, where a combination of causes has operated. It appears now to be settled that in cases where there are concurrent causes of loss, both of which might be regarded as proximate causes, the assured can recover if one of these causes of approximately equal efficiency is an insured peril and the other operative cause although outside the scope of the policy is not expressly excluded; if there are two causes of approximately equal efficiency, one covered and one excluded, the assured cannot recover. In neither case should it be necessary for the court to strain to find a single dominant cause, where there are two such causes which can properly be described as having been effective causes of the loss.
Wayne Tank & Pump Co. Ltd v Employers Liability Ins. Corp. (1973)
Following the decision in Wayne Tank and Pump Co Ltd v Employers’ Liability Assurance Corp Ltd, it is now settled law that where a loss is due to a combination of causes of approximately equal efficiency, one of which is an insured peril and one of which is expressly excluded, the underwriters are not liable.
Roskill LJ said: ‘if the loss is caused by two causes operating at the same time and one is wholly expressly excluded from the Policy, the Policy does not pay.’
In this case the insured supplied and fitted for its customer, equipment for use in a plasticine making factory. However, that equipment was incorrectly installed. Subsequently and before the equipment was tested, an employee of the customer left the equipment activated and unattended overnight. The equipment caught fire and the plasticine factory was destroyed.
The insured tried to recover under a public liability insurance policy which contained an exclusion for liability resulting from “damage caused by the nature or condition of any goods sold or supplied by or on behalf of the insured”.
The Court held that there were two causes of the loss. First the defective installation of the equipment, and second the actions of the customer in switching it on and leaving it unattended prior to testing.
Lord Denning MR and Roskill LJJ went on to find that the first cause was the proximate cause of the loss even though it was more remote in time. Since this cause fell within an exception to the insurance policy the Claimant’s claim failed.
