Say the ratio out loud before you open Reasoning — recalling it unprompted is exactly what the exam pays for.
Why it matters
It is the leading English authority on proximate cause in insurance and the case from which the maxim is usually taught. It also contains the clearest statement of the difference between causation in an ordinary contract action and causation in insurance — a distinction worth two or three marks on its own.
Facts
A ship carrying a cargo of fruit was in a collision. Because of the collision she put into port for repairs. To allow the repairs to be carried out, the fruit had to be handled and moved. The handling, and the delay that went with it, spoiled the fruit.
The plaintiffs claimed on the policy on the footing that the loss was caused by collision, which was an insured peril.
Issue
Was the loss of the fruit proximately caused by a peril insured against?
Held
No. The claim failed.
The reasoning, which is the whole value of the case
The liability of underwriters depends upon the proximate cause of the loss. In an ordinary action for damages on a contract the defendant may be liable for damage of which his breach is an efficient cause, a causa causans; in insurance only the causa proxima is regarded.
Where causes succeed one another, the last cause only is to be looked to and the others rejected, although the result would not have been produced without them. Here the agent which proximately caused the damage to the fruit was the handling; the cause of the handling was the repairs; and the cause of the repairs was the collision. To connect the loss with an insured peril the plaintiffs had to go back two steps in that chain, and English law did not permit it.
Lindley J. added the practical justification: the rule is well known, and people must be taken to have contracted on that footing.
The two cautions to state in an answer
First, proximate cause is not peculiar to marine insurance. Section 55(1) of the Marine Insurance Act 1963 enacts it for marine risks, and the same doctrine applies to a fire policy. The language of the judgment, contrasting insurance with an ordinary contract action, can mislead on this point.
Second, the last-cause formulation is not the modern test. The test an Indian court applies is the dominant and efficient cause, which is not always the last in time. The two cases that show this are:
- Montoya v. London Assurance Co — hides and tobacco were shipped; a storm wet the hides; the smell of the wet hides made the tobacco unfit; the insurer was liable, the peril of the sea being the storm. That chain also had two links, and the assured won.
- New India Assurance v. Zuari Industries — a chain of five or six links from a switchboard flashover to a damaged boiler, and the claim succeeded.
So the difference between Pink v. Fleming and Montoya is not the number of links. In Montoya every link was the natural and direct working-out of the storm; in Pink v. Fleming a human decision — to unload for repairs — intervened.
How to answer on proximate cause
Set out the maxim; give the test (direct, dominant, operative and efficient, applied on a common-sense standard); state Pink v. Fleming and its last-cause formulation; set Montoya and Zuari Industries against it; say which you follow and why. Add that the doctrine is a default rule which the policy may displace — as the terrorism warranty in the standard fire policy expressly does, and as s. 55(1) itself contemplates.