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THE DOCTRINE OF PROXIMATE CAUSE:
A STUDY OF HISTORY AND DEVELOPMENT OF THE MAXIM
Authored by: Tushar Sharma*
* LLM Student, National Law University, Orrisa
___________________________________________________________________________
INTRODUCTION
In insurance, the insurance policy is a contract between the insurer and the insured, which
determines the claims which the insurer is legally required to pay. In exchange for an initial or
a periodical payment, known as the premium, the insurer promises to pay for loss caused by
perils covered under the policy language and it lays down the conditions under which the
payments will be made.
Perils are the incidents which result in the loss and various perils are covered under the policy,
on the occurrence of the perils only can a claim can be made by the insured to get damages. In
the process of determining the perils is where the doctrine of Proximate cause comes in and
helps determine exactly what caused the peril.
The doctrine of proximate cause is the condensed form of “Causa Proxima Non Remota
Spectatur” that translates to the proximate cause and not the remote cause, and what this
essentially means is, while determining the perils the immediate cause of the peril will be
looked into and not the subsequent or prior incidents which lead to the accident through which
the claim arose.
There’s an ongoing debate as to what exactly lead to the implementation and development of
the doctrine, whether it was legislation in a direct or indirect form or was it through the
judgements pronounced by the judges for example in the landmark judgement of “Leyland
Shipping Co. Ltd v. Norwich Union Fire Insurance” and furthermore.
The application of the doctrine differs amongst different fields of insurance law such as life,
accident, marine and fire insurance. The research focuses on development of the doctrine
through various texts and judgements, the different interpretation that were awarded to it from
time to time and also the different legislations in place to effectively apply the principle of the
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doctrine. It also studies the chain of causality and how to determine an unbroken series of
causality and what role does the factor of time play in the doctrine.
WHAT IS PROXIMATE CAUSE?
Insurance laws in the world have a very intriguing history, although there are a few recorded
cases of group self-insurance at an early stage but the formal business of Insurance was
developed in London by way of marine insurance being done to protect voyagers and their
cargo and in exchange a share of the benefits was passed on to the insurer.
If we dwell into the study of Insurance law a very prominent word which reappears again and
again is the term known as the “cause”. The word cause can be defined as “Each separate
antecedent of an event1”. This word cause plays a very crucial role in determining whether an
incident or accident will be covered under the insurance which the insured had obtained.
The term cause or causation has been used in law in two different forms cause-in-fact and
proximate cause, where cause in fact is a direct approach from the action to the result and
whereas proximate cause is a study of series of events and the process to determine as to what
actually led to the loss. The concept of proximate cause is used both in insurance law as well
as tort but although the name being the same the approach of the two is completely opposite
because under tort law while applying the principal of proximate cause one focusses on who is
to be held liable for the loss whereas under insurance law the study is only focused upon
whether the causation will be covered under the policy or not there is no question regarding
“blame” but rather the question is focused on the “pay-out” or as Banks McDowell puts it “the
causation analysis in insurance is almost the reverse of torts”2.
The courts across the world normally adopt one of the three approaches towards determining a
causation and those are:- first is the “conservative approach” , second is the “liberal approach”
and third is the “dominant cause approach”3.
The conservative and the liberal approaches are as the name suggests are the opposites of each
other the conservative approach is one in which even if one of the events of the causal sequence
1
Griffin v. Anderson Motor Service Co., 227 Mo.App.
2
Banks McDowell, ‘Causation in Contracts and Insurance’, (1988) 20 CONN. L. REV. 569, 570.
3
Robert H. Jerry Ii & Douglas R. Richmond, Understanding Insurance Law (4th ed. 2007)
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is not covered under the insurance policy then no claim shall be awarded whereas in the liberal
approach even if one of the causal effects is covered under the policy the claim is approved and
the insured is awarded compensation.
Moving on to the third approach that is what is the focus of this research as to what is the
dominant approach or as it is in common terms known as the proximate cause and how it is
applied under different heads of insurance and how it was developed and what are its
implications and limitations and what is the present status of the proximate cause theory.
DOCTRINE OF PROXIMATE CAUSE
“Causa Proxima Non Remota Spectatur” this Latin doctrine means “The proximate and not the
remote cause must be looked into”. This very maxim is the foundation of modern insurance
laws and is the guiding principle in determining whether a “peril” was actually covered under
the insurance contract by studying the proximate cause of the peril and determining whether
the same was covered under the insurance contract. The doctrine for the very first time finds
mention in the early nineteenth century where in Lord Bacon4 had noted in his works that “It
were infinite for the law to judge the causes of causes, and their impulsions one of another;
therefore it content itself with the immediate cause, and judgeth of acts by that, without looking
to any further degree”5 although the exact word “proximate” wasn’t used rather immediate was
used but later on “Watkins J.” in a judgement went on to further elucidate on Lord Bacon’s
philosophy, he said that “according to the true principle of law, we must look at only the
immediate and the proximate cause”6.
In a landmark case regarding immediate cause that is the “Ionides v. The Universal Marine
Insurance Co.”7 the case involved a ship which was carrying over 6500 bags of coffee to New
York, just before reaching the coast due to some navigational problems the ship got stranded
and cracked. Out of all the bags on the ship 120 were confiscated earlier to the shipwreck and
1000 bags could have been saved but the American military interfered and those were also lost.
The court in its judgement held that the loss of 120 bags due to confiscation and the 1000 bags
4
Francis Bacon, Former Lord Chancellor of England.
5
Maxims of the Law, Reg. 1 in 13 The Works of Francis Bacon, Lord Chancellor of England 145 (Basil
Montagu ed. 1825-34)
6
Lawrence v. The Accidental Insurance Co. Ltd. [1881] L.R.-7 Q.B.D. 216.
7
Ionides v. The Universal Marine Insurance Company [1863] 14 C.B. (N.S.) 259
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lost due to military were not result of the shipwreck and hence was not covered under the
insurance policy and hence no claim could be granted over 1120 bags out of the 6000 bags.
This judgement plays a crucial role in understanding what exactly is meant by the proximate
cause, we are asked to look for the immediate causality of the loss and not the general or the
initial cause and then only can the court decide as to whether the cause was covered under the
Insurance policy or not.
The above mentioned discussion can help one understand as that in a sequential event leading
to a loss the last and the final cause is the most crucial player in determining liability of the
insurer but what happens when to avoid one loss another loss is caused how is the doctrine of
“causa proxima” applied to such a case?
What exactly is meant by the question posted above is that if in order to avoid an insured peril
one brings about another peril can the first peril be regarded as the immediate or the proximate
cause for the event. This problem came up in the case of “Quinta communication SA v.
Warriangton Ltd.”8 the case involved one of the greatest pop stars of the world Michael
Jackson, Jackson was supposed to perform at a venue but just before the event he got the news
of passing away of Princess Diana and he was completely in shock and was unable to perform
so he had to postpone the event to a later date following which the event was rescheduled but
on the day the event was planned there was already an event planned and booked for the very
next day and Jackson had strict policy of not performing at two events at consecutive dates and
hence the event of the next day was cancelled and called off following which the organizer
sued the talent management agency of Jackson but his team argued that it was the cause of first
event the second event was cancelled and the event was covered under the insurance but this
was challenged in the court and the court came to a conclusion that the first peril cannot become
the cause for second peril even if it were to avert the first peril and Jackson could very well
perform at the event if he wanted to.
8
Quinta Communication SA v. Warrington Ltd. [1999] 2 All ER (Comm) 123
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PERILS UNDER INSURANCE LAWS
Peril/s in simple terms means a danger or precisely so an imminent danger, for example if
there’s rockslide taking place and there’s person standing just below it then the landslide is the
peril for the person. In regard to the insurance laws a peril is something which is expressly
mentioned in your insurance policy that is a danger or causality against which the insurance
was issued.
According to the Black’s law dictionary “peril” means “The risk, hazard, or contingency
insured against by a policy of insurance - peril means a certain peril and not the bare possibility
of injury”9. Insurers often state that “both property and liability insurance cover only the risk
of fortuitous loss”10. There are usually 16 basic perils which are also known as the “named
perils” although that isn’t an exhaustive list as the covered perils can vary from insurance to
insurance with regard to an individual’s policy.
A lot many people tend to use to terms interchangeably a lot and those are hazard and peril, to
put it simply hazard is the aspect which is looked at before the insurance is issued that is what
all are the risk factors such as in case of life insurance the habits or lifestyle of an individual
will be looked at where as in a home insurance the main concern will be the geographical
location and other natural risks and the hazards determine as to whether a policy will be issued
or not and what will be the premium whereas on the other hand peril is what constitutes the
policy it determines what all is covered under the insurance and its role comes into play only
after a claim is made in order to determine whether the policy actually is covering the loss the
perils insured are looked at.
Another term that one may come across while looking at perils is the “all perils” to put it simply
all perils is the exact opposite of “named perils” that is it includes all perils unless until
specifically excluded from the list of covered perils.
9
Thomasson v. Henwood, 235 Mo.App. 1211, 146 S.W.2d 88, 91
10
Robert E. Keeton & Alan I. Widiss, Insurance Law § 5.3(a), at 475 (1988)
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THE DEVELOPMENT OF PROXIMATE CAUSE DOCTRINE THROUGH VARIOUS
LEGISLATIONS AND JUDGEMENTS
From the time when proximate cause was first mentioned in the case of “Lawrence v. The
Accidental Insurance Co. Ltd” in 1888 it was developed through various interpretation that
were offered to it by the Hon’ble Judges of the Apex Courts. One such development in the
history of the doctrine cam in the year 1918 by way of judgement delivered in the case of
“Leyland Shipping Co Ltd v. Norwich Union Fire Insurance Society Ltd.11”.
A brief background of the case is as follows, the Plaintiffs were the owners of ship by the name
of “IKARA” and the defendants were the insurer of the same ship. The ship was insured of any
kind of sea perils but with the exception of “capture, seizure and detention and the
consequences thereof or any attempt thereat piracy accepted, and also from all consequences
of hostilities or warlike operations before or after declaration of war”. On the fateful day of the
incidence while the ship was on its way to the docks it was hit by a torpedo and it started
flooding and filling up. Following the strike by the torpedo the crew tried to dock it at the port
of Le Havre and was allowed the same but then a gale started and the ship seemed to be at the
imminent danger of crashing into the port and the port authorities fearing the same asked the
crew to take it to outer port of the city but when it was moved the damage also increased and
as a result the ship slowly started to sink from the front end and eventually the ship was lost to
the sea.
The case was brought to the Hon’ble Court of Lord Shaw, the petitioners contended that the
ship was lost due to the strong gales and perils of the sea and if it was allowed to dock at Le
Havre without delay it would not have been lost and in series of causality the winds were the
closest to the sinking and hence they were the cause of loss.
Lord Shaw in his judgement observed that in the series of events the chain of cause was
unbroken since the time the torpedo hit the vessel and it was irrelevant what time does the
action occur what the court is concerned with finding out is what was the proximate cause of
the loss and not the last cause and hence the torpedoing was held to be the proximate cause of
loss and hence no compensation was granted to the petitioners.
11
Leyland Shipping Co Ltd v. Norwich Union Fire Insurance Society Ltd, [1918] AC 350, HL
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This judgement is considered to be one of the guiding principles of the doctrine of proximate
cause as it lays down the guiding principles of the doctrine such as, the doctrine shall be applied
“to existences rather than to occurrences” further on Lord Shaw stated that “to treat “proxima
causa” as the cause which is nearest in time is out of the question”.
Time and again many other words have also been used to convey the meaning and give a better
understanding of the term such as “Immediate12”, “Direct13”, “Efficient14” and also the word
“Inevitable15” has also been used.
The above mentioned arguments dealt with the process of development by means of judicial
decisions but we can also find pieces of legislation both in India and outside India wherein the
doctrine of proximate cause was given recognition by way of legislation such as the section
55(1) of the English Marine Insurance Act 1906 which states that “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” the same wordings were adopted to the
Indian Marine Insurance Act 1963 in section 55(1) of the act.
There are two schools of thoughts in regard to the doctrine of proximate cause one which was
the above mentioned one which goes to the simple proximate cause whereas the second school
of thought has a slightly different approach to the principle and that is the one expressed by
Lopes LJ stating16 “that the rule does not refer to immediate cause, but the efficient or
predominant cause”. Hence, “the cause which is truly proximate is that which is proximate in
efficiency”17.
This second school of thought is what has been adopted by the Indian courts widely giving
more emphasis on the efficient proximate cause rather than simply the proximate cause.
An important case in this line is the “Kajima Daewoo Joint Venture v. New India Assurance
Co. Ltd.”18, A number of machines were employed at a site one of the many machines was a
TIL excavator. It had been insured for, and on one day it burst when its lubricating system
12
Everett v. London Assurance [1865] 19 C.B. (N.S.) 126.
13
Becker Gray & Co. v. London Assurance Corporation [1918] A.C. 101.
14
Leyland Shipping Co. v. Norwich Union Fire Insurance Society [1918] A.C. 350 (H.L.).
15
Shell International Petroleum Co. v. Gibbs [1983] 2 A.C. 375 (H.L.).
16
Reischer v. Borwick [1894] 2 QB 548
17
Leyland Shipping Co. Ltd. v. Norwich Union Fire Insurance Ltd [1918] AC 350, p. 368
18
Kajima Daewoo Joint Venture v. New India Assurance Co. Ltd, (2005) 1 CPJ 534
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failed. The machine reportedly suffered irreparable damage to the engine. A surveyor was
assigned to asses the loss/damage. The claim was repudiated on the ground, inter alia, “that the
machine did not suffer any external impact and that the damage to the engine was mechanical
on account of seizure of the engine due to deprivation of lubricant oil, which was not within
the purview of the policy”. The court observed the findings of the assessor on record and held
that the mechanical failure of the machine was due to its slipping on the hilly terrain and the
lubrication loss was just incidental to the slipping of the machine and hence it would fall under
the purview of the policy.
PROXIMATE CAUSE UNDER VARIOUS HEADS OF INSURANCE LAW
The doctrine of proximate cause is widely applied under insurance laws but its application
under various heads differs slightly in their true aspect we shall try to study the same in this
section.
Marine Insurance :- In the case when loss is caused due to some perils of the sea the maxim
“causa proxima” is applicable and that is what is the applicability of the maxim is in Marine
insurance. “Perils of the sea” has been defined through “The Hague Visby Rules” 19 which
under Article 4(2) (c) defines “perils” as “perils, dangers and accidents of the sea or other
navigable waters, and provides a defense for the carrier from liability for loss or damage”.20
In the case of “Dudgeon v. Pembroke”21, a ship which had been insured by way of a time
policy but it was subsequently lost due to the very strong gush of the winds and huge tides. The
argument put forward by the insurer was that he could not be asked to cover the losses and held
liable as the ship was not fit for embarking on a voyage. The House of Lords applying the
maxim observed that the immediate cause for the loss was gush of the winds and huge tides
and therefore, the insurance company was liable to pay for the losses even though the un-
seaworthiness of the ship also played a crucial role in the loss of the ship.
19
Dudgeon v. Pembroke [1877]2 AC 284 (H.L)
20
Ibid
21
Supra note 19
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Fire Insurance :- The principle of proximate cause is widely applied in case of Fire Insurance.
In the case of “Stanley v. Western Insurance Co”.22 that “any loss resulting from the fire and
resulting from the necessary and bona fide efforts to put out the fire whether by the spoiling of
goods by water or throwing the articles out the window or pulling down a house for the purpose
of preventing the spreading of the flames are within the policy of fire insurance.”
In another case of New India Assurance Co. Ltd. v. Vivek Cold Storage23 , a case was filed by
end of the petitioners against the New India Assurance Co Ltd a company which was engaged
in the business of insurance, the insured wanted to hold liable the insurer under the
comprehensive policy (fire insurance policy). What transpired was that the policy covered fire
risk as well as other risks to building and machinery and deterotorial loss to the stock which
consisted of potatoes kept at the cold storage facility. The ‘accident clause’ covered the”
breakdown of machinery due to unforeseen circumstances”. A leak of ammonia gas in the unit
occurred, and due to the leak the plant had to be shut down, resulting in the loss of the complete
stock of potatoes kept in the cold storage. The insurance company repudiated the said claim as
“there was no breakdown of the plant and machinery”. This court rejected the contention stating
that the plant was shut down for repairs of the leak which in-turn is a breakage of machinery,
which resulted in damage to the stored potatoes. Therefore, the insurance company was held
liable.
Accident Insurance:- In case of an accident if there is a death and there is direct causal
connection then without question the doctrine of proximate cause is applied to it . The doctrine
can be easily attached to the case. In “Issit v. Railway Passengers Assurance Co.”.,24 a
passenger in a train had obtained insurance against accidental death. The insured had a fall
from the train and had to be hospitalized. He underwent treatment at the hospital but eventually
passed away and died from an attack of pneumonia. The court held that the death due to
pneumonia was incidental to the cause of the fall and the injury from the fall was the actual
cause of death hence the insurance company was liable.
22
Stanley v. Western Insurance Co. [1868] KR 3 Eych 71
23
New India Assurance Co. Ltd. v. Vivek Cold Storage, (1999) CPJ 26 (NC).
24
Issit v. Railway Passengers Assurance Co. [1889] 22 QBD 504
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CONCLUSION
An essential point to be noted in the context of ‘immediate cause’ or ‘nearest cause’ is that
while deciding the proximate cause only the immediate action not the remote cause shall be
taken into consideration. All causalities are not treated as proximate cause of loss, the cause
must be “effective”, “dominant” and “operative”. It should showcase a direct impact on the
resulting act. In precise terms “proximate cause operates to determine the real cause not the
actual”.
Lord Bacon made a statement in Maxims of law which is relevant in this context, he said:
“it was infinite for the law to consider the cause of causes, and their impulsions one of another;
therefore it is contenteth itself with the immediate cause and judgeth of act by it without looking
into any further degree.”25
From the time a case is presented before a court, it's the inherent duty of the insured or the
affected party to give the elaborate details of all the happening of an the accident and after that
comes the role of the insured to prove beyond reasonable doubt that liability lies upon the
insured by proving that the actual proximate cause of the incidence was out of the purview of
the policy of the insured and hence the insurer is not liable to bear the losses. Keeping this point
in view it also becomes the inherent duty of the insurer to expressly define the exceptions
associated with the policy there should not be any intention to hide the facts from the insurer
and also inform him about what all are the excluded peril then on; keeping in view both the
facts that is the proximate cause and also the intentions of the insurer because insurance law is
a beneficial legislation the court directs its verdict. A very crucial point to be noted is just in
case of a series or chain of events is that the loss must be due to the perils covered by the policy.
Proximate cause is a key principle of insurance and is concerned with how the loss or damage
actually occurred and whether it is indeed as a result of an insured peril. It is a settled principle
that in order to decide whether a claim is covered by the policy, the status quo is to establish
proximate cause. The Kerala High court has observed that, simply taking the last event in point
of time is not a judicious act but a routine process, a process of selection26 and this statement
reconfirms the significance of the rule of causa proxima. Causation itself is inherently complex.
The cases that have been discussed in the paper reflect that the paradigm of proximate cause is
25
Francis Bacon, The Work Of Francis Bacom: Law Tracts. Maxims Of The Law.
26
O. Sivadasan v. The New India Assurance Co. Ltd. & Ors., (2011) 2 KLJ 694.
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a necessary one, and it was not made more complex when the courts began to utilize this
paradigm. Rather, the judgements have served to reflect our innate perceptions about the
degrees of causation. Hence, differentiation between the proximate and the remote is neither
artificial nor arbitrary.
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Wan Izatul Asma Wan Talaat, “Causa Proxima Non Remota Spectatur: The Doctrine of
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Manjeet kumar Sahu, ‘The Rule of Causa Proxima as Principle of Insurance”,
Kathmandu School of Law Review, ISSN 2091-2110, Volume-4, Issue-1.
Patrick, J Kelley. "Proximate cause in Negligence law history, theory and the present
Darkness." Washington University Law Review (January 1991): 54-56.
KSN, Murthy and Dr KVS Sarma. “Modern Law of Insurance”. Haryana: Lexis Nexis,
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Devikrupa D, Proximate Cause, “Is it Interpretation of Courts or Is There Any Clear
Definition”, 2018 IJLMH,Volume 1, Issue 3, ISSN: 2581-5369.
Albert Levitt , “Cause, Legal Cause and Proximate Cause”, Michigan Law Review ,
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