CAUSATION. Loss must
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1. CAUSATION Week 4
2. CAUSATION Loss must “caused by” an insured peril.
Normally quite easy,
cause and effect
fire occurs, burns property.
Other occasions not so easy
Mud slide occurs following a storm which damages property
Policy excludes mudslides but covers storm
What is cause
3. PROXIMATE CAUSE “Proximus causa” the test.
Motor Oil Hellas (Corinth) Refineries SA v. Shipping Corporation of India(1990)
Implied in contract of insurance
It is the presumed intention of the parties
The active efficient cause which sets in motion a chain of events which brings about a result without the intervention of any other cause.
4. MARINE INSURANCE ACT 1906 S.55(1) …the insurers is liable for any loss proximately caused by a peril insured against, but not liable for any loss which is not proximately caused by a peril insured against.
5. GRAY v. BARR (1971) “it has been settled in insurance law that the “cause” is that which is the effective or dominant cause of the occurrence, or, as it is sometimes put, what is in substance the cause, even though it is more remote in point of times such cause to be determined by common sense.”
6. GRAY V. BARR (1971) Grays wife having an affair with Barr
Gray went to Barrs place where wife was.
Gray was carrying a shotgun
Barr wrestled with Gray
Shotgun went off and hit Mrs Gray
Policy covered accidental bodily injury
What was cause?
7. SUCCESSIVE CAUSES Normally last cause in time
Leyland Shipping Co. Ltd v. Norwich Union Fire Insurance Society Ltd (1918)
Ship torpedoed in war was towed to safety.
Large storm brewed up and ship towed from harbour
Was it storm or war
Concluded it was war and therefore was excluded
8. POLICY WORDING Policy wording can change the cause requirement.
Direct and indirect cause
9. DIRECTLY OR INDIRECTLY ‘Directly’ implies proximate cause
Indirectly implies something less
Oei v. Fisher
Occupant failed to turn off fat fryer.
Damage arose indirectly from the occupation of the premises
Exclusion “damage arising directly or indirectly from…ownership or occupation of any land or building.”
10. LAST CAUSE Last cause not insured peril but preceding one was - what is the position?
If last cause is the reasonable and probable consequence resulting directly and naturally in the ordinary course of events from the cause which precedes it, the peril insured against is held to be the cause of the loss
11. STANLEY v. WESTERN INSURANCE CO (1868) “Any loss resulting from an apparently necessary and bona fide effort to put out a fire, whether it be by spoiling the goods by water, or throwing articles furniture out of the window, …in a word every loss that clearly and proximately results, whether directly or indirectly from the fire is within the policy.”
12. EXCEPTED CLAUSES If peril insured against is the reasonable and probable consequence of the excepted cause then the exception applies.
If there is a “novus actus interveniens” then the excepted cause does not apply.
13. NOVUS ACTUS INTERVENIENS Marsden v. City & County Assurance Co (1881)
Shop window damaged by a mob attracted to a fire was held to be caused by riot.
Lawrence v. Accident Insurance Co. (1881)
Passenger had a fit and fell in front of a train
Deemed death accidentally caused and not a result of the fit.
14. CONCURRENT CAUSES If two causes occur at the same time and one is excepted what is the cause?
Jason v. British Traders Insurance Co. Ltd (1969).
Policy covers “accidental bodily injury resulting in and being - independent of all other causes - the exclusive, direct, and immediate cause of the injury or disablement”
15. CONCURRENT CAUSES Excluded “death injury or disablement directly or indirectly caused by or arising or resulting from or traceable to…any physical defect or infirmity which existed prior to an accident.”
Insured had coronary thrombosis caused by stress following a motor accident.
Had pre-existing narrowing of arteries. A clot formed and caused thrombosis.
16. CONCURRENT CAUSES Claim failed.
Bodily injury not “independently of all other causes the exclusive cause of the disablement”.
Two concurrent causes the clot and the accident.
17. SUMMARY The risk insured against must operate.
Once the risk operates, damage to the subject-matter due to efforts to check the progress of the casualty, is covered.
An accident facilitating the loss must be distinguished from an accident causing the loss.
18. SUMMARY Novus actus interveniens. Where human intervention, occurring after the peril operates, causes the loss, that intervention (unless its object was to mitigate the loss) and not the insured peril is the proximate cause.
Death blow cases. Where casualty due to human agency is followed by natural causes the chain of causation is not broken.