Chapter 9. Causation

• Pages: 183-189

CHAPTER 9

CAUSATION

9.1 INTRODUCTION

The insured must establish that the loss for which a claim is made is proximately caused by an

insured peril.

1 Recovery is subject to the parameters of the insurance contract as defi ned by its

contractual terms. The determination of the ‘cause’ of loss is, however, not always an easy task.

A loss may result from a series of events,

2 and as observed by Lord Justice Lindley in Reischer v

Borwick , 3 it is sometimes di cult to distinguish between causes which cooperate in a given result

when they succeed each other at intervals. Further, analysis of what has been called the ‘cause-

event-result’ combination is less than clear. There exists no prevailing agreed and settled criteria

for selecting from the existing circumstances, those events genuinely relevant to interpretation

and application of the provisions at issue in a given context.

4

The insured is permitted to be indemnifi ed so long as the loss is caused by an event stip-

ulated by the insurance contract. The event covered– the ‘peril’– is known as the proximate

cause.

5 Although a ‘common sense’ approach has distorted analysis described as ‘defy[ing]

contradiction’

6 – criticised as ‘a cloak for intuition when data is lacking,’

7 the rules governing

the problem of causation reside within regional marine insurance legislation and the common

law, revealing the law occasioning loss relates to personal accident, fi re, marine, liability and

perils of nature.

9.2 STATUTE

Regional marine insurance legislation simply provides:

Subject to the provisions of this Act, and unless the policy otherwise provides, the insurer is lia-

ble 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.

This section represents a codifi cation of the proximate cause rule formulated at common law.

Indeed it is the common law which assists in determining what constitutes proximate causation

of a loss.

8

1 M. A. Clarke, ‘The Proximate Cause in Insurance Law’ [1981] CLJ 284; J. M. Culp, ‘Causation, Econo-

mists, and the Dinosaur: A Response to Professor Dray’ 49(3) Law and Contemporary Problems 23; A. L. Parks,

‘Marine Insurance Proximate Cause’ (1979) 10 JMLC 519.

2 Dudgeon v Pembroke (1874) LR 9 QB 581, per Blackbur n J, p. 115.

3 [1894] 2 QB 548.

4 J. D. Fraser and D. R. Howarth, ‘More Cause for Concern’ (1980) 4 Legal Studies 131, 138; R. Keeton and

A.Widiss, Insurance Law: A Guide to Fundamental Principles, Legal Doctrines, and Commercial Practices (West Publish-

ing: 1988), p. 546.

5 Ibid.

6 M. A. Clarke, The Law of Insurance Contracts (Lloyds of London Press: 1989), pp. 25–29.

7 Section 59, Barbados Marine Insurance Act, Cap 292.

8 Anguilla Marine Insurance Act RSA 2000 CM 25; Antigua and Barbuda Marine Insurance Act 1959, Cap

711; British Virgin Islands Marine Insurance Ordinance, Cap 257 [1961 Rev.]; Cayman Islands Marine

Insurance Act 1959, Cap 711; Dominica Marine Insurance Act 1959, Cap 711 [1961 Rev.]; Grenada

Marine Insurance Act No. 5 of 1990, Cap 182; St Kitts and Nevis Marine Insurance Act 1959, Cap 711;

St Lucia Marine Insurance Act 1959, Cap 711; St Vincent and the Grenadines Marine Insurance Act,