Remoteness of Damages

Even if the defendant's breach caused the damage in fact (causation), the law refuses to hold him liable for every consequence, however unlikely. Remoteness of damage is the legal limit on the consequences for which a defendant is liable. Two stages: (1) causation in fact (but-for test) and (2) legal causation / remoteness (which of the consequences are recoverable).

Facts: A stevedore's servant dropped a plank into the hold of a ship, which carried petrol vapour. A spark caused a fire that destroyed the ship. Held: the defendant was liable for all direct consequences of a negligent act, whether foreseeable or not. Some harm (damage by falling plank) was foreseeable, and the fire was a direct result. Rule: foreseeability of the kind of damage is irrelevant if the damage is a direct result of the negligent act.

Facts: Oil negligently spilled from the ship Wagon Mound in Sydney harbour drifted to the plaintiff's wharf, where welding was carried on. Cotton waste floating on the oil caught fire from the molten metal, burning the wharf. The experts believed that oil on water would not ignite. Held (Privy Council, Viscount Simonds): Re Polemis was overruled; the defendant is liable only for damage of a kind that is reasonably foreseeable. Fire was not foreseeable; no liability in negligence. Rule: reasonable foresight of the type of damage is the test of remoteness in negligence (although a person who is negligent is liable for all foreseeable consequences, even if the extent of damage is greater than expected).

In this separate action by the owners of ships damaged by the same fire, the court found that the risk of fire, though small, was real and a reasonable person in the position of the ship's engineer would not have disregarded it; liability was established in nuisance and negligence. Rule: a risk that is foreseeable and not far-fetched, and could be eliminated at no cost, must be guarded against.

• Hughes v Lord Advocate (1963): boys playing with an unattended paraffin lamp left near a manhole; the lamp exploded in an unforeseen manner and burned the child. Held: liable, since the kind of damage (burns) was foreseeable, though the exact manner of occurrence was not.

• Doughty v Turner Manufacturing (1964): an asbestos cover slipped into a cauldron, causing an eruption through a chemical reaction. The event was different in kind from the foreseeable risk (splash); defendant not liable.

• Egg-shell skull / thin skull rule: the defendant must take the plaintiff as he finds him. Smith v Leech Brain & Co (1962): a burn on the lip of a worker, who had a pre-malignant condition, caused cancer and death; the employer was liable since the burn was foreseeable. Vosburg v Putney (US). The rule applies to physical vulnerability and, in some cases, to psychological vulnerability.

• Bradford v Robinson Rentals (1967): foreseeable harm of cold (frost-bite) was recoverable even if its severity was not foreseen.

• Extent of harm: no need to foresee the exact extent (Vacwell Engineering v BDH Chemicals: explosion of chemicals, the damage being of a different kind; held that damage was not foreseeable).

A new, independent act or event that breaks the chain of causation, so that the defendant is not responsible for the later damage.

• Act of a third party: the chain is broken if the act is unforeseeable and independent (Knightley v Johns: the police inspector's negligent order; held the chain was broken). Scott v Shepherd (the squib case): a squib thrown into a market and tossed on by others; the first thrower was liable since the subsequent acts were reflex actions.

• Act of the plaintiff: if the plaintiff's own act is unreasonable (McKew v Holland: a plaintiff with a weak leg went down steep steps and was injured; the chain was broken). A reasonable act in a dilemma, caused by the defendant's wrong, does not break the chain (Haynes v Harwood, rescue cases).

• Natural events: Carslogie Steamship v Royal Norwegian Government (a later storm damage).

• The Oropesa (1943): a captain's decision to launch a lifeboat in a storm, in which the sailor drowned, did not break the chain (a reasonable decision in an emergency).

• "But for" test: Barnett v Chelsea & Kensington Hospital Management Committee (1969).

• Material contribution to the damage: Bonnington Castings v Wardlaw (1956: silica dust).

• Material increase of risk: McGhee v National Coal Board; Fairchild v Glenhaven Funeral Services (2002) (mesothelioma: where multiple employers exposed the claimant to asbestos and the specific source could not be identified, each employer who materially increased the risk was liable, an exception to the but-for test). Wilsher v Essex AHA (1988) confined the exception.

• Loss of a chance: Hotson v East Berkshire AHA (not recoverable in general).

• Deceit/fraud: the defendant is liable for all direct consequences (Doyle v Olby), as an exception to foreseeability.

• Contract: Hadley v Baxendale, the rule on damages (Section 73, Indian Contract Act: damage which naturally arose in the usual course of things, or which the parties knew likely to result). Contrast between the tests in contract and tort is often asked.

• Strict liability: Cambridge Water and Transco require foreseeability of the type of damage also in nuisance and Rylands v Fletcher.

Indian courts, in the absence of a unique doctrine, follow English principles, generally the Wagon Mound foreseeability test in negligence claims, and the direct consequence concept where the wrong is intentional. In claims involving public-law compensation or statutory no-fault compensation, remoteness is less relevant.

Expect: Re Polemis vs Wagon Mound (directness vs foreseeability; which was overruled); facts (plank into ship's hold; oil and cotton waste); Hughes v Lord Advocate (kind of damage); Smith v Leech Brain (thin skull); Scott v Shepherd (squib) as a novus actus case; Bonnington and Fairchild for causation; contract remoteness (Hadley v Baxendale); Assertion–Reason on whether the thin skull rule is an exception to foreseeability.