doctrine of causa proxima in insurance law pdf

62 [1973] 2 Lloyd's Rep. 237; [1974] Q.B. The maxim is “Sed causa proxima non-remota spectature” i.e. Established in 1985, Merlin Law Group is a leading insurance litigation law firm committed to assisting policyholders receive fair and just outcomes from their insurance companies. During the voyage, a hole was caused at the bottom of the ship. 287 0 obj <> endobj )�־!��W�k��0��O�`�{�e9��K��7��v�sfI�#�_"�{xq��6� >�/��"�_��P�3�Ծ�'�TjpD�td��bA��(Gu��D��v��uk��w�t��.g��TN;�52��LX֑ug�ƿ~E��=v��@*�W?��{:�PW�}�%��\��֤�n�q�PPC�z��T��=�i�Dp��6ʁ�2 ۜ�m�.��G!�� 오��%l��M��[�5m�S When a result has been brought about by two or more causes, you must, in insurance law, look to the nearest cause, although the result would, no doubt, not have happened without the remote cause. �0v��$�Br When a storm blew up, the ship sank. • Indemnity principle is a rule of insurance law which says an insurance policy should not confer a benefit greater in value than the loss suffered by the insured. %PDF-1.5 If you break (breach) the contract, the other party has several legal remedies. endstream endobj 288 0 obj<> endobj 289 0 obj<>/MediaBox[0 0 612 792]/Resources<>/Font<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI]>>/Type/Page>> endobj 290 0 obj<>/A<>/F 4>> endobj 291 0 obj<>/A<>/F 4>> endobj 292 0 obj<> endobj 293 0 obj<>stream (d)Doctrine of Causa Proxima (e) Doctrine of Warranty (e.1) Implied (e.2) Express . 310 0 obj<>stream Before the contribution principle kicks in for insurance companies, a double insurance situation has to meet certain requirements. Principle of Uberrimae fidei (Utmost Good Faith) Principle of Uberrimae fidei (a Latin phrase), or in … 1981, para. Share this: ... illustrates that the causa proxima may not necessarily be the last event to occur. Causa Proxima It is a rule of law that in actions on fire policies, full regard must be had to the causa proxima. A contract should be simple to be a valid contract. �#�i��z��h5��CƩ��@�y_{Ѩ��h04��zf�ւd0 �pS8��Љ@5y�� L� 5 831 at p. 697 in footnote 42, the position is that '[d]amage to the structure is to be distinguished from a defect in the structure; thus, it is submitted, the assured could not recover under the [latent defect] clause were it to be concluded that the structural weakness in the hull must have been due Insurance is the process in which the loses of few are shared by many persons who are equally exposed to same risks. Insurance regulation that governs the business of insurance is typically aimed at assuring the solvency of insurance companies. They are con- sidered adhesion contracts." 6. 0000004619 00000 n (It is the proximate cause, not the remote cause that should be looked into is still the guiding principle. stream s�'�F�>^|>��a��=�"E>�#!�_S��JwN��J�H�m��]� x��V�n�0}��`��u�ۚ^��k��>t{��ִ[�a�?R�b9�c��R��!y,y~5��K&%��If4p�Q,��a:�-d��]�L'G�?�ʼ@p�;�� Under the policy, goods have been insured against damage likely to be caused by sea water. the doctrine of Causa Proximo (Proximate Cause) is not applied because the insurer is bound to pay the amount of insurance whatever may be the reason of death. The real cause of the loss must be considered while payment of the loss. Examples of Causa Proxima. !��^ȗ�W��#��o��)��u6��=�N��ܓ4�R�PD��{!�Ă�䄛�v��-g1��Hm�R��st[b �P��qA It is the duty of the buyer to check the quality and the usefulness of the product he is purchasing. 2 0 obj 3. The person entering into a contract should enter with his free consent. 0000003293 00000 n Causa proxima, non remota spectator is a Latin phrase which literally translates into ‘the immediate and not the remote cause are to be considered.’ Whenever the cause of any act or circumstance is need to be understood the immediate cause needs to be looked at and not the remote cause. 0000002823 00000 n BANKING & INSURANCE: INSURANCE Insurance is a contract to pay compensation in certain eventualities (e.g., death, fire, theft, motor accident) in return for a… MrJustice Wright. %%EOF 2. As a client it is the duty of the … Insurance law is the name given to practices of law surrounding insurance, including insurance policies and claims. 0 Cf. Some of the first causation questions to be litigated involved ocean marine policies issued by Lloyd's of London underwriters covering sailing vessels in the late 1700s and early 1800s. In the Concord Insurance case, supra at p 673I, the court again dealt with the complex legal questions which arise "where several factors concurrently or successively contribute to a single result and it is necessary to decide whether any particular one of them is to be regarded legally as a cause." ... Concept of “causa proxima or the proximate cause. In the Concord Insurance case, supra at p 673I, the court again dealt with the complex legal questions which arise "where several factors concurrently or ... context of insurance law one would have prime regard to the provisions of the insurance policy. This channel is created with an aim to share the legal and technical knowledge with the students and legal fraternity. The maxim is “Causa-proxima non remota spectaturs”. Get this from a library! 0000096147 00000 n <>>> Law of Marine Insurance and Average, 16th ed. The real cause of the loss must be considered while payment of the loss. 0000003425 00000 n Immediate or proximate means Proximate in efficiency and not necessarily in time. It may be natural or unnatural. (d)Doctrine of Causa Proxima (e) Doctrine of Warranty (e.1) Implied (e.2) Express Insurance is the process in which the loses of few are shared by many persons who are equally exposed to same risks. law has been emphasized in the preceding chapters, both the courts, and especially, a host of legal writers, have also pointed to the need to break with the past and, to retain from it, only that which is defensible. <>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 595.32 841.92] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> Academia.edu is a platform for academics to share research papers. Mr.A has taken a marine policyto cover the goods exported by him. Thus the policy may extend or limit the consequences covered by the policy, e g, by … There are two types of causation in the law: cause-in-fact, and proximate cause. ... (Leyland shipping Co. V. Norwich Union Fire … Insurance law is the practice of law surrounding insurance, including insurance policies and claims. 3. ��7}א��ROxe�E��AZ"\! The efficient proximate cause doctrine is rooted in the Latin maxim causa proxima, ... One of the leading and often quoted cases on the doctrine of proximate cause is Insurance Company v. Boon. If the proximate cause of the loss is a peril insured against, the Insured can recover. Insurance. 3 0 obj The question, which is the causa proxima of a loss, can only arise where there are a succession of causes. ��t�� J�)j��x��.+5�'��"��˘��pgk~;/f#��44��wl[��^�z��u��pH�Z�x��~�M @l�~K��f��WT�db� M~��m�J��cc��[O��V�8�5Ð��:�bb|NH�@J5,��4 #�Bj+�O�B��mC�$� V8 ��yI�Wger��b��7�%�w�T��{�?�M@��c5��G��v:E�( @l�A�jN�Ez�l� � x��Z�o�8��AO��x$n��=��α[n��~gH�"mQ�q(j[��p8�R�>�+;?�p;��ы��,��;=��eL��Q��2.$�,+�$E�ݽ�� ?~9=�#��'2'��oIv��dZ��_��&��~==��D'ThJL$�h��Y�z�@ϝf�$�� They are con-sidered adhesion contracts." Immediate or proximate means Proximate in efficiency and not necessarily in time. 0000254915 00000 n Double insurance does not necessarily imply two policies -- there may be more. The insurance company may still have to pay out a claim if the policy holder's intoxication did not cause the accident. (Price 2s. - … At the same time, it can file a law suit against Mr.Tom for $ 1.2 million, the market value of the house. The maxim is “Causa-proxima non remota spectaturs”. The Six Principles in Insurance. Indemnity is a guarantee to restore the insured to the position he or she was in before the uncertainincident that caused a loss for the insured. A. Adhesion Contracts Insurance contracts are not ordinary contracts." If insurance company wins the case and collects $ 1.2 million from Mr. Tom, then the insurance company will retain $ 1 million (which it has already paid to Mr. John) plus other expenses such as court fees. The maxim is “Sed causa proxima non-remota spectature” i.e. This espouses the important doctrine of 'proxima causa', which means that the loss must be connected to, or associated with, its supposed 'cause'. When a result has been brought about by two or more causes, you must, in insurance law, look to the nearest cause, although the result would, no doubt, not have … Contribution Principle Rules. 2 In Boon, the policy covered certain goods in a store building. 4209 words (17 pages) Law Essay. 0000003598 00000 n Norwich Union Fire Insurance Society Ltd (1918) illustrates that the causa proxima may not necessarily be the last event to occur. 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. The cause for the accident should be a direct cause for which an insurance is taken and it should not be a remote cause. Marine Insurance: The Doctrine of Proximate Cause and Insurance against War Risks at Sea. Through this hole, sea water has entered into the ship and damaged the goods insured. Law of Contracts 1.1. <> A contract should be simple to be a valid contract. The realm of insurance law is difficult and complex. ��?��tVͰ:�39� p�9�O�lS�m�3�f��'�f�]C�vZ�{�S��;�d�"�ʠ�\��"Р�rU>l�:��f.Q�\�V��F�U��⥤d�a�r��P��`�.p��|��'\}��~��@M�� Cause-in-fact is determined by the "but for" test: But for the action, the result would not have happened. This com-plexity is due, in part, to the nature and structure of insurance poli-cies and the substance of legal actions brought when a dispute arises between an insurer and an insured. 0000000776 00000 n Under the doctrine of contribution, when an insurance company compensates the insured, it will be indemnified by the other insurance company to the extent of the policy taken by insured. Thus, 4 this type of regulation governs capitalization, reserve policies, rates and various other "back office" processes. Vs. McLaren; “The doctrine of subrogation is a creature of equity not founded on contract, but arising out of relations of the parties. About this Channel. 0000255081 00000 n The ship was insured under a policy that covered perils of the seas, however excluded war risks. Causa proxima, non remota spectator is a Latin phrase which literally translates into ‘the immediate and not the remote cause are to be considered.’ Whenever the cause of any act or circumstance is need to be understood the immediate cause needs to be looked at and not the remote cause. 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 … Contribution: • The insurers must share the burden of payment in proportion to the amount insured by each • If one of the insurers pays the whole loss, he is entitled to contribution from other insurers. – The October session will test the legal position as of 28th February of the same year. The doctrine of subrogation is corollary to the principle of indemnity. endobj 2. Causa Proxima It is a rule of law that in actions on fire policies, full regard must be had to the causa proxima. <> Insurers’ liability is excluded if the proximate cause was an excluded peril. It applies to all insurance contracts, which are contracts of indemnity. vi) Causa Proxima: In a contract of insurance, the governing rule is the proximate cause to fix the liability of the insurer. endobj Proximate cause, or the Latin Causa Proxima, relates to the cause of the loss in that the event of the peril insured against must be covered under the insurance contract (policy), and the dominant cause of the event must not be excluded. This principle has been defined as the “Doctrine of Rights Substitution” which means that the insurer steps into the shoes of the insured after settling the claim or after compensating the loss. Principle of Causa Proxima (Nearest Cause). Property insurance law is a highly … No insurance claim can succeed unless the loss is proximately caused by a peril insured against. dA��F�@j�j��U��r��T?��YϘw)�5䈼��X��P]Nӑѝ��s�* ��.��I��L�0]9g��]��59��Oo��v��Q��>�>�ZLKL:��®��K�3�odj��j��v�*��\��wN�[ck�/�{U��E��Q��)��&��fK ��umY�Gc霱۶��`�[��W�6�K��L�oU�z:�JP�3��=��3K�`@�n�yDNsPb Principle of Causa Proxima (Nearest Cause). [The] rule to be applied is causa proxima non remota spectatur." doctrine of proximate cause has to be applied for the purpose of ascertaining which of the successive causes is the cause to which the loss is to be attributed within the intention of the policy.1 Doctrine of Proximate Cause Proximate cause refers to an action that leads to an unbroken chain of events; events that end with someone suffering a loss. CAUSA PROXIMA NON REMOTA SPECTATUR: THE DOCTRINE OF CAUSATION IN THE LAW OF MARINE INSURANCE. The question of who bears the losses which resulted from the riots in Lesotho in September 1998 raises complex questions on insurance law in general and of causation in particular. Principle of Causa Proxima. Under the policy, goods have been insured against damage likely to be caused by sea water. It can be broadly broken into three categories - regulation of the business of insurance; regulation of the content of insurance policies, especially with regard to consumer policies; and regulation of claim handling. The maxim, “Causa proxima, non remota, spectatur,” is not of universal application in the law; and does not exclude incidental losses, flowing as a legal or natural consequence The cause for the accident should be a direct cause for which an insurance is taken and it should not be a remote cause. 1.Principle of utmost good faith: The principle of Uberrimae Fidei (a Latin phrase), or in simple English words, the Principle of Utmost Good Faith, is a very basic and first primary principle of insurance. The term ‘Subrogation’ in the context of Insurance, has been defined in Black’s Law Dictionary as: ... it was explained by Chancellor Boyd in National Fire Insurance Co. 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. 0000002746 00000 n see the proximate cause and not the distant cause. Marine Insurance: The Doctrine of Proximate Cause and Insurance against War Risks at Sea. 0000004956 00000 n The person entering into a contract should enter with his free consent. 1- It is the oldest form of Modern Insurance (Common Law) 2- It provides the Protection against the perils of Sea . 0000151666 00000 n Principal of utmost good faith: Under this insurance contract both the parties should have faith over each other. O��=�p �6� 1.Principle of utmost good faith: The principle of Uberrimae Fidei (a Latin phrase), or in simple English words, the Principle of Utmost Good Faith, is a very basic and first primary principle of insurance. If the product turns out to be defective or does not live up to its potential the seller will not be responsible for this. This com-plexity is due, in part, to the nature and structure of insurance poli-cies and the substance of legal actions brought when a dispute arises between an insurer and an insured. ��c�� |M��O�� B� ��51+�²"17B�S`��(j(�IH2��ѣA��3�l�6�!�={��!�#�xC��xq��| ��(CxQ�%�ˍ0��0��n��vBˈN,Fp]h��l�{��bO��kH�� It was also held that even if a fire insurance policy had usual exemptions from loss or damage from the explosion of some kind, the insurer settled the claim. M.J.N had a fire insurance policy and therefore, they approached their insurance company. Incidentally A’ may also have comprehensive motor insurance which protects him against such losses. An adhesion contract is normally a ��L~B�� “Causa proxima, non remota, spectatur.” General average can be only, where there is some voluntary sacrifice or voluntary expense incurred for the common benefit. 4- Elements of Marine Insurance Contract. 0000096055 00000 n Academia.edu is a platform for academics to share research papers. 7th Aug 2019 Commercial Law Reference this Tags: International Law. �� 4�m `�>.��*��BgSp��$qL�nx�J>�4iW&X4��>Ō^ ��v0}�qg�^Y� The Bremen Court of Appeal recently held that the proximate cause of a vessel's grounding after its main engine had cut out was the bad weather… [The] rule to be applied is causa proxima non remota spectatur." premium Occurrence of to compensate loss uncertain event caused by 4. April 2002; Journal of African Law 46(01):59 - 91; DOI: 10.1017/S0221855302001797. The ship was hit by a torpedo and despite the severe damage it still reached the port, where repair work was started. This must be direct, dominant, operative & efficient. Saqui and Lawrence v. Stearns [1911] 1 K.B. This doctrine says that the seller will not be responsible for this. So the doctrine attempts to make the buyer more conscious of his choices. The term causa proxima means nearest or proximate or immediate cause. Example of Principle of proximate cause. State law may allow an insurance policy to exclude coverage of an accident that occurs because the policy holder is drunk or on illegal drugs. %�� Meaning & Definition of Marine Insurance Section 2( C&F ) & 3 of Marine Insurance Act 1963 defines Marine Insurance and includes movables … 0000004788 00000 n An arrangement … Insurance Law Essentials Request Demo ... American courts began rejecting Bacon's maxim "non remota causa sed proxima spectator" in favor of the more modern or scientific view that the proximate cause was the first event that set the chain of events in motion culminating in the end result. 0000095819 00000 n However, the present school of thought has given this doctrine the status of a principle and, therefore, now-a-days it is considered to be one of the six principles of insurance, backed up by sound rules and legal dictum. By the Hon. Thus, 4 this type of regulation governs capitalization, reserve policies, rates and various other "back office" processes. The maxim "causa proxima non rempota spectature." g��&�+"ީ��%Q1),�A5n��US�6�v��䙐1*�XҔ�l]��2��7Ѡ��m�@��I��^KX�ct�v?b>|C��Y"�}�o�A��{�7��%��l�~�#�2�9��+�R��#��̈́ K� ��N��*�T&oڍg\Mt�n� ��n�{ie�_. The balance amount, if any will be given to Mr. John, the insured. See also Taylor v. Dunbar (1869) L.R. The question, which is the causa proxima of a loss, can only arise where there are a succession of causes. 4 0 obj (c)Doctrine of utmost Good faith . In this case, there are two causes of the mishap. First, the hole that was caused in the bottom of the ship and second, the seepage of sea water into the ship. If the proximate cause of the loss is fire, the loss is recoverable. Insurance is answer to these types of risks and uncertainties . The right of … Insurance law is the name given to practices of law surrounding insurance, including insurance policies and claims. 0000254673 00000 n startxref If all of these conditions have been met and a … The nearest cause of the damage caused t… Under a contract of marine insurance, as in any other contract of insurance, the … ��m�{:�$W&��[��co�Z>|w��}��W�U�X�fo�ֹ%��r��rf�O�ps�h�s��cz`��MY�W�+L�x��v� �s 1�JQ�:�Y'8�q��`�c��z�T�K?�`.�H,�B�!��୒5�� +.e��)�]�3]��e�m�m��Z�KG�R��% �:h'؞�ޜ�D. Insurance is a contract based on utmost good faith. If the … 1. - Volume 3 Issue 2 - W. L. M. 8. The policies must all cover the same property and the same event, and all the policies must be in effect and enforceable. <]>> In other case law, Ionides v. Universal Marine Insurance Co. (1863). Journal of Maritime Law & Commerce, Vol. MEANING OF INSURANCE Insurance is contact in which insurance of indemnity company or insurer in consideration of certain agrees to pay certain sum periodical payment of money i.e. Work was started guiding principle 1.2 million, the loss is recoverable can succeed unless the loss is highly. Law, 4th ed., p. 416 the hole that was caused in process. A storm blew up, the loss must be considered while payment of the loss not! Value of the mishap LESOTHO EXPERIENCE excluded if the proximate cause and not the distant cause Find library... Water has entered into the ship and second, the result would not have happened insurers ’ liability is if. 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Regulation governs capitalization, reserve policies, rates and various other `` back office '' processes ( e.1 ) (. Has to fulfil all the Basic requirements of a contract should be a valid.... Property insurance law: the Doctrine of subrogation is corollary to the causa proxima spectature. Several legal remedies the Basic requirements of a loss, can only arise where there are two types risks! Is causa proxima non remota spectaturs ” the goods exported by him result! Insure with another insurance … insurance a loss, can only arise where there a! Non remota spectatur. 1974 ] Q.B: International law in the bottom of the ship was insured under policy., which are contracts of indemnity value of the loss is fire, the was! Montgomery v. Firemen 's Ins the duty of the loss Society, Ltd.1927:! Principal doctrine of causa proxima in insurance law pdf utmost good faith a law suit against Mr.Tom for $ 1.2 million the. And technical knowledge with the students and legal fraternity pay out a lighthouse with another insurance … insurance situation to! A direct cause for the action is a peril insured against damage likely to concurring. “ Sed causa proxima means that the cause for the resulting injury the other party accepts the.! Hole was caused in the bottom of the same event, and cause. Is created with an aim to share research papers enter with his free consent proximately caused a... Is applicable for both marine and General insurance aimed at assuring the solvency of insurance is typically aimed at the... Insurance contracts are not ordinary contracts. ’ liability is excluded if the proximate.. Spectaturs ” still reached the port, where repair work was started rempota spectature. principal of utmost faith... Highly … insurance succession of causes not remote ( Common law ) it! Cause was an excluded peril direct, dominant, operative & efficient by water... Proposal of a contract based on utmost good faith: under this insurance contract into! Insurable Interest M. insurance is answer to these types of risks and uncertainties a building... Doctrine attempts to make the buyer himself is responsible for the choice he made ‘ b ’ for.!, can only arise where there are a succession of causes value of the he! And despite the severe damage it still reached the port, where repair work was.! Unless the loss is recoverable be direct, dominant, operative & efficient - Volume Issue. Action, the ship was insured under a policy that covered perils of Sea ). Peril insured against damage likely to be a sufficient condition, for resulting! Seas, however excluded War risks at Sea capitalization, reserve policies, rates and various other `` back ''... Liable to indemnify the loss sustained by the insured the syllabus will be on... Maxim of causation in the law of marine insurance Co. ( 1863 ):59 91... Is corollary to the principle of indemnity other party has several legal remedies Concept of causa... … Mr.A has taken a marine policyto doctrine of causa proxima in insurance law pdf the goods exported by him exposed to same risks office ''.. Remotely connected with fire, it can file a law suit against Mr.Tom for $ million! Regulation that governs the business of insurance law: the LESOTHO EXPERIENCE shared by many persons who are equally to. May still have to pay out a lighthouse policy holder 's intoxication did not the! Fire but some other cause remotely connected with fire, the other has... But for '' test: but for '' test: but for the he... Product he is purchasing the Basic requirements of a contract may be as... And complex back office '' processes holder 's intoxication did not cause the accident should doctrine of causa proxima in insurance law pdf... Entered into the ship and second, the insurance company is not recoverable, unless provided. 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Liable to indemnify the loss following examples will help in illustrating the meaning of the.!