Dear Friends, you know that insurance has become as essential as our basic requirements of food, shelter, cloths etc. In these days we are facing various types of risks in our home as well as in our offices, road while travelling etc., some are man made and some are nature driven. Insurance against known and future risks/perils will provide you financial security and keep to some extent intact against losses you would occur in absence of insurance. Whether insurance is of your health, property, business, vehicle, etc., it is important that you will be covered with adequate insurance.
Causation is a fundamental component of insurance law. The insured desires indemnity against the risk of certain types of losses, underwriters issue policies that provide such indemnity in the event of certain perils, often with other perils being specifically excluded. Any coverage provided by insurance policy is contingent upon there being a causal connection between the loss and the covered peril.
In insurance loss or damage may cause may be product of various events or multiple causes. A multiple event may give raise to a serious event, which causes loss to the insured due to insured peril.
The doctrine of cause has been since very old age and the famous category of material, formal, efficient and final causes, one involving the subtlest of distinctions. But the idea of cause of occurrence, or production of an event or the bringing about a result, is an idea perfectly familiar to the mind, and to the law, and it is in connection with that, that the notion of proximate cause is introduced.
The insurance companies generally considered various things and events, while deciding an insurance claim. They generally consider a chain of events, which have raised cause of accident or cause of action which has been brought such incident. They try to establish a link to find out the main cause behind the incident to satisfy them that the incident happed due to genuine cause, which raised the event insured for.
They try to find our whether incident occurred is actually attributable to or intended as a result of insured peril.
Wikipedia defines; In law, a proximate cause is an event sufficiently related to an injury that the courts deem the event to be the cause of that injury.
if an action is close enough to a harm in a “chain of events” to be legally valid. This test is called proximate cause. Proximate cause is a key principle of Insurance and is concerned with how the loss or damage actually occurred.
Insurance Glossary Defines: Proximate Cause —
(1) The cause having the most significant impact in bringing about the loss under a first-party property insurance policy, when two or more independent perils operate at the same time (i.e., concurrently) to produce a loss. Courts employ a set of proximate cause rules to resolve causation disputes when a property policy states that it covers or excludes losses “caused by” a peril and there is more than one peril at work in a fact pattern. Under common law, whether the policy provides coverage depends on which peril is chosen as the proximate cause. If the peril selected as the proximate cause is covered, courts consider the loss to have been caused by the covered peril and will hold that the loss is covered. If the peril selected as the proximate cause is uncovered or excluded, courts consider the loss to have been caused by the uncovered or excluded peril and will hold that the loss is not covered.
(2) As a principle of tort law, proximate cause refers to a doctrine by which a plaintiff must prove that the defendant’s actions set in motion a relatively short chain of events that could have reasonably been anticipated to lead to the plaintiff’s damages. If the defendant’s actions were “proximate” or close enough in the chain of causation to have foreseeably led to the plaintiff’s damages, courts will impose liability. Otherwise, if the defendant’s actions set in motion a long, bizarre chain of events that could not have reasonably been foreseen to lead to the plaintiff’s damages, courts will not impose liability. In tort law, multiple actions by one or more defendants that are a substantial factor in producing the loss can qualify as proximate causes.
LET’S CONSIDER AN EXAMPLE;
Example 1: Driver of “Car A” runs a red light and hits “Car B,” which had a green light, causing injury to the driver of Car B. Driver of Car A had a duty to not run the red light, and, assuming no extenuating circumstances that excused running the red light, his actions in doing so directly (and therefore, proximately) caused injuries to the driver of Car B.
But proximate cause can also be the most difficult issue in a personal injury case. Not every remote cause of an injury will result in a right to recover damage.
Example 2: Driver of “Car A” runs a red light, and “Car B” which has a green light, swerves to avoid being hit. The driver of Car B is fuming and nervous, with a racing pulse. Upset, the driver of Car B continues driving, and three blocks later, hits a parked car, injuring himself. The driver of Car B can try and claim that the actions of the driver of Car A caused him to get hurt when he hit the parked car. And it may well be a remote cause; but it is probably not the proximate cause.
Sometimes, the actions of the person who got hurt can be the cause of their own injuries.
B. RELATION OF CAUSE AND EFFECT BETWEEN THE EVENT AGAINST AND THE LOSS;
From above discussion, we know that the relation of cause and effect must be established between the event insured against and the loss but in most of the cases, it is not easy to trace relationship. Sometimes some intermediary or subsequent events occurs and it become difficult to find out relationship with causes and the insured perils. The insurance companies should disentangle such intermediary or subsidiary event to find our actual cause of action, which contributed insured peril.
Ionides Vs. Universal Marine Insurance Company it was held that – “The relation of causation is a matter that cannot be often distinctly ascertained, but if in the ordinary course of events, the one antecedent is constantly followed by other”. sequence they may be taken to stand in common parlance, in relation of cause and effect.
The ordinary rule of insurance law is that you are not to trouble yourself with distinct causes, that you are not to go into metaphysical distinctions between causes efficient and causes material and causes final and so on, of the rest of them, but you are to look into proximate and immediately operating cause of the loss.
C. RULE OF PROXIMATE CAUSE BASED ON THE INTENTION OF THE PARIES;
Proximate cause is not a device to avoid the trouble of ascertaining the real cause or the common-sense cause, and though it has been and always should be vigorously applied in insurance cases. This rule is based on intention of parties as expressed in the contract into which they have entered, but this rule must be applied in good sense, so as to give effect to and not to defeat those intention of parties to the contract.
The principal of “Causa Proxima”, is not to be used for drawing subtle distinctions between the various phrases used in the policy, but for the purpose of ascertaining whether loss falls within the policy.
D. LETS’ CONSIDER SOME JUDICIAL DECISION TO UNDERSTAND WHAT OF PROXIMATE CAUSE;
We know that, where there is succession of causes, the law in respect to the contract of insurance is that the last of the causes is to be looked into and other rejected.
1. Clan Line Steamers Ltd. Vs. Board of Trade; there was collision between two ships, results in delay and mishandling of goods, which further deterioted. Lord Esher, MR held that the damage to the goods was not direct result of collision;
“The law will not allow the insured to go back in the succession of causes to find out what is the original cause of loss”.
2. Marsden Vs. City and County Assurance Company: the plate glass in the plaintiff’s shop front was insured against loss or damage originating from any cause whatsoever, except fire, breakage during removal etc. A fire broke our on the premises adjoining those of the plaintiff and slightly damaged the near of his shop, but did not approach that part, where the plate glass was. Whilst the plaintiff is removing his stock and furniture to a place of safety a mob attracted by the fire broke the shop shutters and took away the plate glass. It was held that the breakage, etc., was not damage by fire within the meaning of the exceptions, and the insurer was liable. The court said that, no doubt remote cause of damage was the fire, but the proximate cause was lawless violence of the mob. Since breakage was not caused by fire, it was decision of lawless mob and their violence.
3. Leyland Shipping Company Vs. Norwich Union Fire Insurance Society; it was held that proximate cause of loss does not mean that which is the nearest in point of time to the disaster, but means the real efficient or dominant cause of loss. Proximate cause is the cause which sets other causes in motion. It often earliest in the point of time.
4. Pink Vs. Lemming; it was held that where an independent cause operates to produce the damage, the fact that the event insured against has given occasion for the operation of the independent cause dose not constitute the damage or loss, a loss within the independent cause does not constitute only those causes which are direct and natural consequences of the event insured against are to be looked into.
5. Kelly CB Justice in Smith Vs. Accidental Insurance Company: the insurance is against cuts. It is not the cut which kills but the haemorrhage which follows or something which intervenes. If, on the fourth day (after the accident), mortification had, as in the present case, intervened, could it have been said that the death was caused, not by cut, but by mortification? It was held that where company makes itself liable for death arising from cuts and bruises, the necessary intention of parties must be to insure not merely against a cut or bruise, but against anything by which a cut would naturally follow.
6. Stanley Vs. Western Insurance Co. it was held that damage which would result naturally and directly from bona fide attempt to put out a fire would be loss within the meaning of the policy. Hence loss caused by smoke arising out of the fire, or damage cause by water escaping from pipes, melted in the course of fire, is covered by the policy. In those cases, the connection between the fire and the loss is so close that we can easily establish a connection between them.
Further it was held that, if cause of loss falls within the exceptions in the policy, the insurers are not liable for the damages. It may happen that the event insured against and the expected perils, jointly operate to produce the loss, and in such an eventuality two cases bust be distinguished;
1. Where the consequence of each can be easily ascertained; and
2. Where consequence cannot be easily assigned with precision, either to the event, or to expected cause.
In the former case it is clear, if the loss can be traced to be unconnected with the excepted cause, the insurers are liable. Where loss is the result of the combined operations of both the expected cause and the event insured against and consequences cannot be traced to either, the principal of proximate cause to be applied to see, whether insurers are liable or not.
7. Isitt Vs. Railway Passengers Assurance Co. the assured under policy of insurance against, “death from the effects of injury caused by accident” fell and dislocate his shoulder. He confides to bed and due to clod caught with pneumonia and died. It was held that the accident rendered him unusually susceptible to cold, and as the catching of cold and pneumonia were attributable to state of health and consequent on the accident, his death resulted from the effect of injury caused by accident within the meaning of policy.
Note: if excepted cause is first in point of time, and sets in motion a train of events leading to the event insured against, which ultimately produces loss, such loss is not covered. The liability of insurers is exempted if the excepted cause can, under the circumstances of the case, be regarded as the proximate cause of the event insured against. In this case the excepted cause is the original cause to the loss, as a sequence without any break, the loss is not covered, even though the event insured against is one of the intervening causes.
8. Coxe vs. Employer Liability Assurance Corporation Ltd. By a policy if insurance deceased a military officer was insured with the insurer against death cause accidently by violence due to any external and visible means. The policy was subject to condition that it did not insure against death” directly or indirectly caused by, arising from or traceable to war”. During a period of war, it become necessary to protect railway line as directed by the government and order received by him. He was deputed near railway station and had been knocked by the train and died on spot.
it was held that general public has not right to walk along with railway line, where accident happened and the lights of that place has been extinguished under the Act of the Parliament. The insurance company was not liable in this case, since war was the excepted cause and the deceased was found near railway lines under dangerous circumstances, because of his duty, the accident therefore caused by war, or was directly or indirectly traceable to it.
CONCLUSION: There are numerous case laws and judicial decision of Doctrine of Proximity of Cause. to treat proximate cause as the cause which is the nearest in item is out of question. Causes are spoken of as if they were district from one another, as beads in a row or links in a chain, but if this metaphysical logic has to be referred to, it is not wholly so, the chain of causation is a handy expression, but figure is inadequate. Causation is not a chain but be treated as a net. At each point influences, forces, events, precedent and simultaneous meet and the radiation from each point extend, indefinitely. At point where these various influences/ forces meet, it is for judgement, as upon a matter of fact to declare which of the remote cause, thus joined at the point of effect, was the proximate and which was the remote cause. The cause which is truly proximate is that which is proximate in efficiency.