ABSTRACT

This project focuses on whether proximate cause and its pertinence in marine insurance and
climate it has a reasonable definition or is it interpretation of Courts. The point-by-point study
shows that the court chooses and deciphers what proximate cause is in each case and the court
has full tact to choose the issue in each case and along these lines there doesn't exists any free
definition from this doctrine. this has been analysed with the assistance of various case laws and
illustrations.

Properties are presented to different perils like fire, seismic tremor, blast, perils of sea, war, riot,
and common uproar, etc. and each occasion is the impact of some cause. The law anyway won't
go into an unobtrusive examination or to convey back the investigation farther than is essential.
It looks only to the quick and proximate cause, all causes going before the proximate cause being
dismissed as too remote. The doctrine of proximate cause, which is normal to all parts of
insurance, must be applied with acceptable sense to offer impact to and not to crush the intention.
Wherever there is a succession of causes which more likely than not existed to create the loss, or
which has indeed contributed, or may have added to deliver it, the doctrine of proximate cause
must be applied to learn which of the progressive causes is the cause to which the loss is to be
credited inside the aim of the strategy
 TABLE OF CONTENTS

Chapter 1: Introduction

1.1. Introduction
1.2. Research Problem
1.3. Existing Legal Situation
1.4. Literature Review
1.5. Scope and Objective
1.6. Research Question
1.7. Hypothesis
1.8. Methodology

Chapter 2: Doctrine of proximate cause

1.1. Use proximate cause vs Remote cause

Chapter 3: Application of the proximate cause

Chapter 4: Test for Determining Proximate Cause

Chapter 5: Recommendation and conclusion

INTRODUCTION

1.1 Introduction

The Properties are presented to different perils like fire, seismic tremor, blast, perils of ocean,
war, revolt, and common disturbance etc. and each occasion is the impact of some cause. The
law anyway won't go into an inconspicuous examination or to convey back the examination
farther than is essential. It looks only to the quick and proximate cause, all causes going before
the proximate cause being dismissed as excessively distant. The doctrine of proximate cause,
which is regular to all parts of insurance, must be applied with acceptable sense to offer impact
to and not to crush the intention. Any place there is a progression of causes which probably
existed to deliver the loss, or which has in fact contributed, or may have added to create it, the
doctrine of proximate cause must be applied to discover which of the progressive causes is the
cause to which the loss is to be ascribed inside the intention of the policy.1

1.2 Research Problem

This project focus on whether proximate cause and its pertinence in marine protection and
climate it has an unmistakable definition or is it interpretation of Courts. The detailed
examination demonstrates that the court chooses and deciphers what proximate cause is in each
case and the court has full discretion to choose the issue in each case and along these lines there
doesn't exists any free definition from this doctrine. this has been investigated with the assistance
of various case laws and illustrations.

1.3 Existing Legal Situation

1
E.R. Hardy Ivamy, General Principles of Insurance Law, 6th edition, Butterworths, London(1993), p.406-409.
As of now, in marine insurance law the insurer company not just indemnifies the covered peril,
but also against the loss or damage causally linked to the perils covered under the insurance
contract2.The term “casually linked” is not in the statutes as the legislature has not drafted it yet
but the concept is the general rule of ‘Proximate causa’ or causa proxima non remota spectator.
The doctrine was defined under the Section 55(1) of the Marine Insurance Act, 1906 of the U.K.

“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”3

Section 55 of the Marine Insurance Act declares the general rule of proximate cause previously
adopted by the common law and directs that insurer will be liable for the damages ‘proximately’
caused by a peril insured against. This principle is against the laws followed earlier i.e. of
‘remote cause’. The law stated that the event closet in time and directly leading to the loss is the
cause of the loss.

The Act further do not deal with the concept of doctrine ‘proximate cause’ as used and this lead
to numerous rendition of the explanation of the doctrine. Proximate cause is stated to be the
immediate cause not necessarily nearest in time.

1.5 Scope and Objectives

The scope of the paper is to

2
Howard N. Bennett, Causation in the Law of Marine Insurance: Evolution and Codification of the Proximate
Cause Doctrine, The Modern Law of Marine Insurance (D. Rhidian Thomas, LLP, 1996) 173.

3
Section 55, Marine Insurance Act, 1906
  Focus on Proximate cause in marine insurance
 Study on the threats and challenges of smart contracts and its relevant consequences.

The objective of the paper is

 To examine the current legal situation of Proximate cause

(i) How to determine the proxima causa?

1.7 Hypothesis

There is no trouble if a solitary peril acts and causes the loss however often these perils don't
work in Isolation, yet acts in succession or all the while and it will be hard to evaluate the overall
impact of each peril or select one of these perils as the actual cause of loss.

Law says to look solely to the quick and proximate cause, all causes going before the proximate
cause being dismissed as excessively far off. In any case, it has been said that deciding the
proximate cause of a loss is essentially the use of good judgment, and in a considerable lot of the
cases that would give off an impression of being so.

1.8 Methodology

In this paper, the doctrinal methodology of research has been adopted in which analytical method
of research have been used. In this paper the researcher has relied on primary sources such as
legislations and case laws; and secondary sources such as Books, Journals, and Articles.
 Chapter 2

Doctrine of Proximate Cause

A Proximate cause refers to an activity that prompts a solid chain of events; events that end with
somebody enduring a loss. Proximate cause is utilized to inspect how a loss has happened and
the number of may have assumed a function in causing the loss. Proximate cause refers to the
underlying activity that caused a loss. The beginning stage in the chain of events that prompted a
loss. As the notable proverb of lord Bacon runs: "It were endless for the law to think about the
causes of causes and their impulsions one of another hence it fought itself with the prompt
cause" and rejects all causes going before the proximate cause as too remote.4

Sometimes the direct cause is anything but difficult to decide; Somebody tosses a ball through a
window and breaks a window. For this situation, the direct cause is the demonstration of tossing
and it is anything but difficult to make the association between the cause and the loss. In any
case, on the off chance that a youngster lights a sparkler, at that point expecting that the sparkler
will detonate in their grasp, throws the sparkler to a subsequent kid. The subsequent kid
additionally fears the looming blast and continues to throw the sparkler to a third kid. This third
kid is the unfortunate beneficiary of the sparkler at the exact snapshot of blast; a loss happens as
the kid is harmed.

The subject of proximate cause gets significant in figuring out who is liable for the wounds to the
third kid. Direct cause is anything but difficult to interface with the loss. The subsequent
youngster threw the sparkler to the third kid realizing that there would be a blast. This

4
Marsden v. City and Council Assurance (1865) LR 1 CP 232
demonstration exhibits either malicious intent or if nothing else a level of wanton disregard for
another's wellbeing. The subsequent kid is then directly liable for the third kid's wounds; the
direct cause of loss.

2.1. Proximate Cause v. Remote Cause

The reasonable arrangement conceived by law for fixing the cause of the loss is the doctrine of
proximate cause, communicated in the legal maxi, Causa Proxima Non Remota Spectator, which
implies that proximate and not remote cause will be taken as the cause of the loss. "where
different factors or causes are simultaneous and must be chosen, the issue is decided as one of
truth and decision falls upon the one to which might be differently credited the qualities of
reality, predominance, efficiency…” Said lord in Leyland case5

The classic definition of proximate cause is this: 'Proximate cause implies the dynamic,
proficient cause that gets under way a train of occasions which achieves an outcome, without the
intercession of any power began and working effectively from another and free source.6

2.2 . Avertion of one Loss Resulting into Another

Whether steps are assumed to deflect one loss by insured perils, which bring about another type
of loss, can be viewed as proximately caused by the first peril. The case included a show because
of be given in Ostende by Michael Jackson, which must be dropped because of passionate stun
endured by Jackson on hearing the information on the demise of Princess Diana. Show was
rescheduled however this thus included dropping a further show to be given in Barcelona as
Jackson had a policy of not performing on the continuous days. Contest identified with the

5
Leyland’s Shipping Co. v. Norwich Fire Insurance Co., (1918) AC 350

6
Pawsey &Co. v. Scottish Unionand National Insurance Co.(1907)
foreseen loss of profit from retraction of the Barcelona show. The advertisers were insured under
two strategies: an essential policy and a different deductible repurchase (DBB) policy which
insured the aggregate prohibited by the deductible in the essential policy. In this way, the live
issue between the advertisers and the DBB insurers was whether the losses following from the
undoing of the Barcelona show were recoverable under the DBB policy.

The Court of Appeal held that essential safety net providers were obligated for the losses brought
about by the advertisers by cause of the dropping of the Barcelona show, as this was plainly
inside the control of advertisers and Jackson and along these lines outside the policy. It emerged
because of Jackson's failure to act in Ostende and the ensuing endeavors by the advertisers to
mitigate the loss emerging from the Ostende show by rescheduling it, despite the fact that that
implied the wiping out of the Barcelona show.

As per later choice of the House of Lords and the Privy Council, the doctrine of proximate cause
is not, at this point coordinated to the cause proximate as expected, however is to be taken as
alluding to the predominant or compelling cause despite the fact that it isn't closest as expected.

This doctrine of proximate cause is normal to all parts of insurance and is based presume the
intention of the parties in the contract.

Chapter 3

APPLICATION OF THE PROXIMATE CAUSE

There are various results of the standard of Proximate cause on the insured and insurer. Initially,
this standard limits the risk of liability of the insurer only to the loss which is a proximate cause
of the insured peril. Also, it augments the obligation of the financiers concerning far off causes,
contributed by specific conditions without which such an occasion would not have occurred. 7

The Application of this doctrine isn't difficult when the loss is caused by only one event. In such
cases the court just glances at whether such cause is covered under the insurance policy Or not 8.
It gets hard for the court to determine the genuine cause of loss when there are more than one
cause which adds to the loss. The circumstance turns out to be more troublesome when all the
causes show up similarly compelling.

3.1 Application of proximate cause to general insurance policies

The rule of proximate cause is likewise relevant in the assurance of insurance liabilities, similar
to Motor insurance, fire insurance and so forth its guidelines and applications are down on the
ground, and cases can be referred to uninhibitedly once current realities of a specific case are in
pari material. On case of Liesch v The standard life assurance9 the court held causality is a
philosophical and legal inquiry. The law adopts a viable strategy by regarding the causality as
viable authentic issue. The doctrine of proxima causa has been utilized in various non marine
insurance cases. On case of Sherwin-Williams Co. Of Canada v Boiler Insp and Ins. Co. Of
Canada 10the court held that "the immediate or proximate cause may not be the last, or, in fact,
that in any predetermined spot in the rundown of causes yet is the one which has been differently
depicted as the 'effective', the 'dominant' or 'the cause without which' the loss or damage would
not have been endured." The principle of proxima causa has created in the United Kingdom with
time. On case of Wayne Tank co Ltd v The Employers obligation Assurance Co 11lts the court
applied the doctrine of Proxima cause in choosing a property damage guarantee.

3.2 Two or more proximate cause of loss

Generally, more than one cause that leads to a loss or damage. These causes may work at the
same time or progressively. Susan Hodge, contended that there can be circumstances where the
causation to the loss can be ascribed to different causes

In Lloyd (JJ) Instruments Ltd v Northern Star Insurance Co Ltd, 'Miss jay' a yacht the proportion
of the case is that where there are two employable causes one covered by the policy risks and one
not then given that that the subsequent cause is anything but a rejected peril the guaranteed can
recover. There was just a single less and the complete fix bill for the structure to be paid by

7
Arnould's Law of Marine Insurance and Average, 763 at p. 185 (Sir M.J. Mustill & J.C.B. Gilman, 16th ed. 1981).

8
Susan Hodges, Cases and Materials on Marine Insurance Law (Cavendish Publishing, 2004) 336.

9
Liesch v The standard life assurance ,2005 BCCA 195; 39 B.C.L.R. (4th) 313 a

10
Sherwin-Williams Co. Of Canada v Boiler Insp and Ins. Co. Of Canada, [1950] S.C.R. 187, aff’d, [1951] A.C.
319 (H.L.)

11
Wayne Tank co Ltd v The Employers liability Assurance Co lts ,1974, QB 57.
insurer. A loss might be supposed to be caused by dangers of the ocean even where the ocean
state is what could sensibly have been normal. The word 'proximate cause' and direct cause came
to be utilized conversely and there can be more than one proximate cause of loss.12

In the case of Wayne Tank and Pump Co Ltd v Employers Liability Insurance Corporation Ltd 13
the offended parties planned and introduced hardware for storing and passing on fluid wax in a
factory. The plaintiff had a policy of insurance which reimburse them for 'damages ensuing upon
... damage to property because of mishaps'. The insurance policy had a provision which barred
the loss by 'the nature or state of any merchandise... sold or transported by or for the benefit of
the protected'. The gear burst into flames because of negligence and devastated the factory. The
offended parties requested that the backup plan indemnify which they won't. The court held that
the dominant cause of loss was the flawed idea of the establishment of the gear and therefore the
backup plan won't be liable. The thinking given by the court was that there were two separate
causes, one was covered under the insurance policy and the other was avoided. Since in the
current case it could plainly be recognized that the loss was caused by a provision which was
explicitly prohibited, therefore the insurer is not liable to indemnify. In this manner when there
are two or more compelling proximate causes and there are express rejections in the policy and
the loss is caused because of the cause avoided the insurers are not liable to pay.

Chapter 4

Test for Determining Proximate Cause

Courts have formulated some broad standards for deciding proximate cause in cases where perils
are acting sequentially or simultaneously as follows:

A. Where perils are acting continuously in a solid grouping, that is, one danger is brought
about by and follows from another risk, "where perils are acting successively in a whole
outcome, that is one peril is brought about by and follows from or each cause in the

12
Instruments Ltd v Northern Star Insurance Co Ltd, ‘Miss Jay Jay’ , [1987] 1 Lloyd’s Rep 32, CA

13
Supra note 11
 arrangement is the sensible and likely outcome, straightforwardly and normally bringing
about the conventional course of events from the cause which goes before it.

The difficulty emerges when the result can be appointed with accuracy neither to the peril nor to
the excepted cause:

(a) The excepted danger goes before an insured risk, the insurer isn't liable. Where a tremor
fire (an excepted danger) spread by characteristic methods and consumed the insured
premises, the insurer was not liable as the loss was proximately brought about by the
excepted peril.14

(b) The excepted risk follows an insured peril; the insurer isn't liable if the loss brought about
by each is undistinguishable. Lawrence v. Mishap Insurance Co15. Wherein it was held
that the demise of an individual tumbling from a railroad stage in a fit and being
murdered by a passing train isn't proximately brought about by the fit.

B. Where perils are acting in continuously in broken arrangement, each risk is autonomous
of other,

(a) If no excepted danger is included, the insurer will be liable for losses brought about by
the insured peril.

14
Tootal Broadhurst Lee & Co. v. London and Lancashire Fire Ins Co. (1908) Welford. Fire (3rd ed.)498

15
(1881) 7 QBD 21
 (b) If a normal danger is included and goes before an insured risk the insurer is liable for the
loss brought about by the insured peril. Hence a fortified glass protection policy covered
breakages from any danger aside from fire. A fire happened in the neighboring premises
and exploiting it a horde broke the insured fortified glass to submit robbery. It was held
that crowd activity was the cause for loss and not fire thus the insurer was liable16.

C. Where the perils are acting simultaneously that is all the while. Where the loss is brought
about by the activity of two simultaneous and autonomous causes one of which is the
danger insured against the other an excepted cause, the loss isn't inside the policy since it
very well might be precisely depicted as brought about by the excepted cause and it is
unimportant that it could be portrayed in another manner that would not bring it inside
the exemption.

(a) The insurer is liable in the event that one of them is an insured danger and none of them
is an excepted risk or the losses brought about by the insured and excepted peril can be
recognized.
(b) The insurer isn't liable if the losses can't be recognized. Where the cases are
exceptionally muddled, the strict legal arrangement isn't summoned yet settled by
bargain typically by the insurers by a liberal interpretation of the facts.

BURDEN OF PROOF OF PROXIMATE CAUSE OF LOSS

At the point when loss is because of the guaranteed cause at peril of the sea than insurer gets
subject to indemnify the insured. The obligation of the insured for guaranteeing reimbursement
from safety net provider will comprise of specific perspectives, for example, notice of the loss,
outfit points of interest of the loss, to outfit confirmation of loss and so forth On the off chance

16
Marsden v. City and County Assurance Co., (1865) LR 1 CP 232
that the insured finishes every single determined obligation and, at that point makes a case then
the insurance company needs to indemnify. In the event that the insurance company decays to
indemnify, at that point the guaranteed can get a suit the court and needs to demonstrate that the
Proxima causa was the one which is insured peril. The evidence of the Proxima causa in various
framework are-

A) Perils of the sea

Perils of the sea is characterized to mean the regular activities of the sea that defeats the strength
of an all-around planned boat avoiding potential risk and following the marine practices. In the
renowned case of “Campania Naviera vascongada v British and Foreign Marine Insurance Co
Ltd”. the court declared that the "onus of verification lies on the insured to demonstrate that the
loss was caused because of the perils of the sea. There must be some evidence by the insured to
demonstrate the by perils of the sea" 17The weight to demonstrate that unseaworthiness of the
offended parties transport Is on the backup plan. On case of Green v Brown, the court held that
"there is a presumption of damages at peril of the sea when a boat has cruised and never knew
about." 18

B) Peril of barratry

"Barratry has been characterized as an unjust demonstration resolutely dedicated by the group or
the expert to the bias of the proprietor or all things considered". 19At the point when the
guaranteed cases of loss because of barratry, the onus of confirmation is on the insurance
company to demonstrate that there was arrangement by the proprietor, the guaranteed onus on
him the too demonstrate that there was no plot with respect to the proprietor or group of the boat.

17
Compania naviera vascongada v British and Foreign Marine Insurance Co. Ltd, (1934)54LILRep35

18
Green v Brown, (1743) 2str 1199

19
Id
It adheres to the customary law doctrine that the person who cases must give evidence to his
case. The insured also has the obligation to demonstrate his guarantee and declare that there was
no complicity.

So, it has been set doctrine that for jury to ponder a proximate cause inside the insured peril, at
that point the guaranteed must present all the evidence required.

Chapter 5

Recommendation and conclusion

The principle of proxima causa should be interpreted sensibly and ought not be utilized as an
activity to unscramble a concepts, causes or far off causes. To get the advantage of proximate
cause guaranteed more likely than not satisfied every one of his obligations and responsibility
and it must be in compliance with common decency. So an empirical methodology should be
applied as to discover what caused the loss, there should be exacting interpretation of law and
great confidence must be utilized with the goal that it didn't overcome the marine insurance
contract. The loss caused should be inside the ambit of the danger covered, the loss happened
ought to have occurred at peril and no strange case such for the inherent bad habit or boat which
has not cruised.

The doctrine of proxima cause is significant piece of the marine insurance contract. The
ascertainment of the cause commonly controlled by the legal executive every now and then
concocts different approaches to decide the loss. The ascertainment of proxima causa is
exceptionally simple if in that occasion just single cause is there. All things considered the
insurance company should indemnify for the loss. In any case, on the off chance that there are
arrangement of occasions occurring in the insured perils, at that point that peril must be isolated.
All the concurrent causes might be distinguishable and indistinguishable. Divisible causes are
those causes which can be isolated from one another. The loss that occurred because of a
particular cause might be recognized.

On the off chance that in a circumstance the perils that can't be isolated, at that point the
insurance company can't be held liable at all when there is presence of any excepted peril which
was not in insurance contract. On the off chance that the loss happened in the chain of occasions,
at that point it must be seen what occasion at long last set off the marine loss at peril.

Where there is indivisible chain of occasions, the insured perils must be isolated. In the event
that an excepted danger surpasses the normal impact of the insured peril, at that point the loss
caused by the rearmost is the immediate and characteristic result of the excepted peril, than there
is no risk.

In the situation of unbranched chain of causes with no anticipated peril intricated, it is