Proximate Cause

The most important section of the policy wording is that stating the perils insured against. It would be simple indeed to deal with most claims if all marine insurance policies were issued on comprehensive terms. However, the scope of cover afforded by various policies can differ extensively. It can be appreciated, therefore, that it may become necessary to determine exactly which peril is the one to which the loss must be certified, in order to lead at a conclusion as to whether the claim is properly tolerable. Where damage arises in part from an insured peril, and partly from other causes, it will be crucial to determine the extent of loss within the policy provisions. In some cases, a number of distinct causes may operate, in either broken or constant order, making the position problematical. For practical reasons, then, it is necessary to decide the effective cause of the loss, and thus the doctrine of “proximate cause” must be applied. No study of the meaning of the insured perils can be contemplated before a systematic grasp of this principle has been achieved.

Proximate Cause

The term “proximate cause” is sometimes referred to as “causa proxima”. This is consequent from the legal maxim “causa proxima non remota spectator” which can be construed as “the proximate and not the remote cause is to be considered”.

In a lecture given on “causa proxima” said that it was far easier to give an illustration than a definition, and offered the following homely picture:

“We will suppose that John has been asked to stay at home while the absence of his parents. John has, like all boys, youthful tendency, left the house for a walk, once he passes a forest, and, seeing some ripe and juicy fruits on the bough of a tree. Seeing at the end of a bough some fruit which appears to be ripe and refreshing, John being thoughtless, of course the branch wasn’t enough tight to afford his weight, with the result that John falls to the ground and return home injured.” John, as he is an intelligent youth with a legal turn of mind, and during his recovery by reading Marine Insurance with special reference to the subject of “causa proxima”. He would be able, with a view to minimising his own delinquencies, to answer to his mother with the following cause: No mother, my accident was not the result of disobedience. The “causa proxima” of my damage was the breaking of the branch. My disobedience was the” causa remota”, and was in fact so remote that it had nothing whatever to do with the accident. The doctrine of “proximate cause” does not apply exclusively to marine insurance, but marine insurance probably brings the application into effect more than any other branch of the law. There is on this point a clearly settled distinction between marine insurance, and liabilities arising on other matters. In cases of marine insurance, the liability of the Underwriters depends only on the “proximate cause” of the loss, in other matters liability depends on the “causa causans”. Thus, in the case of liability of carriers under a Bill of Lading the real moving cause of the loss can be regarded. For instance, the immunity of the carrier from liability for damage to cargo, arising from certain specified causes, can be expunged if such damage is caused by the neglect of his servants.

When the doctrine of “proximate cause” was first developed some centuries ago, the emphasis was on proximity of time. In earlier days regard was paid only to the immediate cause of the loss, other causes being ignored, although the loss would not have upervened but for those causes. Nowadays this concept is found somewhat unreal, for the circumstances of any loss may vary so widely that its cause may be considered unrelated to the question of time. The strict rule of proximity in time is applied only in cases where a new intervening cause breaks the natural sequence between originating cause and ultimate loss. This is known in legal terminology as “novus actus intervenients”. In such circumstances, and those only, other causes can be disregarded. However, it must be pointed out that upon a given set of circumstances opinions may be divided, and the question of whether the loss is proximately caused by insured perils will be one of fact, therefore the numerous cases where the assured has resorted to the courts in order to discharge his burden of proof. Because of this it has been found difficult to define “causa proxima” in a way which will satisfy every situation, and the Marine Insurance Act, 1906, gives little guidance on the subject, merely stating in Section 55:

Section 55.

(1) Subject to the provisions of this Act, and unless the policy otherwise provides, the insurer is liable for any loss “proximately caused” by a peril insured against, but, subject as aforesaid, he is not liable for any loss which is not “proximately caused” by a peril insured against.

(2) In particular,—

(a) The insurer is not liable for any loss attributable to the willful 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;

However, it is possible to draw certain conclusions from the cases which have been brought about by the problem, in particular from the words of the learned judges, and an examination of some of these cases will avoid a great deal of confusion to the claims man who finds himself confronted with a situation which seems to provide reasons for both a favourable settlement and for declining liability.

While the Marine Insurance Act refers to liability for losses “proximately caused” by perils insured against (unless the policy otherwise provides) some confusion can be created by the actual words used in the clauses themselves, where the expressions may vary from “proximately caused by”, “directly caused by“, “caused by” or “arising from“. Little difficulty should be met with the first three expressions, since all the authorities are firmly agreed that the normal construction of the word “cause” would mean the direct or proximate cause, there being no difference in meaning between the word “direct” and the word “proximate”. However, there have been differences of opinion over the meaning of the expression “arising from”.

Despite this ruling many practitioners are unable to accept that the words “arising from” are not capable of providing a wider approach to a loss than “the doctrine of proximate cause” alone.

Naturally if the loss is effectively caused by a certain peril, and that peril is insured against, there is no doubt that the claim is recoverable. Sometimes, however, separate losses are caused by different perils, and in such cases Underwriters are liable only for the losses “proximately caused” by perils insured against. Thus, where cargo is insured against seawater damage but not pilferage, and the cargo arrives both seawater damaged and with pilferage, the policy would pay for the part of the loss calculated as applying to the seawater damage only.

Takis Kalogerakos

Marine Underwriter

www.greenwoods.org