Marine Cargo Insurance
7
CAUSATION
Principles of causation
The role of causation in insurance law
7.1 It was said in one insurance case that a man’s death was indirectly caused by his birth.1 Although this remark was mainly concerned with the word “indirectly” it illustrates the importance of establishing a direct causal connection between the insured peril, or exclusion, and the loss suffered by the assured. This remains a central issue of insurance law. The question of how close or “proximate” that connection must be, and whether the link is determined by considering closeness in time, or by looking for the effective cause, has varied with the climate of judicial opinion.2 Tests proposed by the judges, such as “proximate in efficiency”,3 give some guidance on the general approach to the problem but tend to disguise the fact that causation is ultimately a matter of first impression, with that impression informed by a reading of the case law. The facts of recent cases may be more indicative, than the words used to define cause, of how causation will be approached by the judges in any individual case. 7.2 There are a number of complicating factors with regard to causation. Firstly, a significant change in approach since the nineteenth century, where closeness in time was the watchword of proximity.4 This theory of closeness in time was rejected by the House of Lords in Leyland Shipping v. Norwich Union 5 where Lord Shaw said that “to treat proximate cause as if it was the cause which is proximate in time is, as I have said, out of the question”.6 This gives rise to problems of construction and application of the Marine Insurance Act 1906 which, as a consolidating statute, was based on cases where proximity in time had been the overriding consideration. 7.3 Secondly, certain perils, in particular fire, are treated in a special way for the purposes of causation. Thus expenses incurred in stopping the spread of fire7 or putting out a fire,8 are traditionally treated as caused by fire, yet expenses incurred to stem a flood are not so treated.9 Perils of the seas also had a special position in the approach of the courts in the nineteenth century to causation, with a rigorous application of the closeness approach in the older cases preceding the decision in Leyland Shipping v. Norwich Union. 10 7.4 Thirdly, the insurance policy may contain a whole variety of causation triggers or even no express causation trigger at all.11 In particular, the revised Institute Cargo Clauses include the following different requirements for causation:“Attributable to” wilful misconduct, Clause 4.1: ICC(A)