Remoteness of Damages

After a mistake has inflicted harm, there must be an obligation with respect to how much responsibility can be fixed and what factors influenced, is the question. In such situation the principle of remoteness of damages is applicable.

An occurrence that constitute a wrong may have a single result or a series of consequences. The harm might be in proximity or too far away.

Even if the plaintiff proves all the essential elements of a tort committed against him, still his claim will be defeated if the harm suffered by him is “remote” consequence of the defendant’s act or omission.

To determine if a person’s consequence is remote or not, various tests have been devised by the courts, i.e., Test of Reasonable Foresight and Test of Directness.

Remote and Proximate Damage

Let’s first understand the concept of remote and proximate damage. If the damage is too remote, the defendant is not liable. If, on the other hand, the act and the consequences are so connected that they are not too remote but are proximate, the defendant will be liable for the consequences. It is not necessary that the event which is immediately connected with the consequences is proximate and that further from it is too remote.

Relevant Case Laws:

Here are some case laws with respect to remote and proximate damage:

1. Scott v. Shepherd (1773) – In this case, A threw a lighted squib into a crowd, it fell upon X. X, in order to prevent injury to himself threw it further, it fell upon Y and Y in his turn did the same thing and it then fell on B, as a result of which B lost one of his eyes. A was held liable to B. His act was proximate cause of the damage even though his act was farthest from the damage in so far as the acts of X and Y had intervened in between.

1. Haynes v. Harwood (1935) – In this case, the defendant’ servants negligently left a horse van unattended in a crowded street. The throwing of stones at the horses by a child, made them bolt and a policeman was injured in an attempt to stop them with a view to rescuing the woman and children on the road. One of the defences pleaded by the defendant was novus actus interveniens, or remoteness of consequences, i.e., the mischief of the child was the proximate cause and the negligence of the defendant’s servants was the remote cause. It was held that the defendant was liable even though the horses had bolted when a child threw stones on them, because such a mischief on the part of the children was anticipated.

Test of Reasonable Foresight

According to this test, if the consequences of the wrongful act could have been foreseen by a reasonable man, they are not too remote. The liability of the defendant is only for those cases which could have been foreseen by a reasonable man, placed in the position of the defendant/wrongdoer.

As per this test, if A commits a wrong, A will be liable only for those consequences which A could foresee. For whatever could not have been foreseen, is too remote a consequence of A’s wrongful act.

Test of Directness

The test of reasonable foresight was rejected and the test of directness was considered to be more appropriate by the Court of Appeal in Re Polemis and Furness, Withy & Co. Ltd. (1921).

According to the test of directness, a person is liable for all the direct consequences of his wrongful act, whether he could have foreseen them or not; because consequences which directly follow a wrongful act are not too remote. In addition to this, if the defendant could foresee any harm to the plaintiff, then he is liable not merely for those consequences which he could have foreseen but for all the direct consequences of his wrongful act.

Case: Smith v. London and South Western Railway Co. (1870) –

1. The first authority for the view advocating the directness test is the case of Smith v. London and South Western Railway Co.

1. In this case, the railway company was negligent in allowing a heap of trimmings of hedges and grass near a railway line during dry weather.

1. Spark from the railway engine set fire to the material. Due to high wind, the fire was carried to the plaintiff’s cottage which was burnt.

1. The defendants were held liable even though they could not have foreseen the loss to the cottage.

1. This case was accepted with the approval in Re Polemis and Furness, Withy & Co. (1921).

Case: Re Polemis and Furness, Withy & Co. Ltd. (1921) –

1. In this case, the defendants chartered a ship. The cargo to be carried by them included a quantity of Benzene and/or Petrol in tins.

1. Due to leakage in those tins, some of their contents collected in the hold of the ship.

1. Owing to the negligence of the defendant’s servants, a plank fell into the hold, a spark was caused and consequently the ship was totally destroyed by fire.

1. The owners of the ship were held entitled to recover the loss – nearly Pounds 200,000, being the direct consequence of the wrongful act although such a loss could not have been reasonably foreseen.

The “Test of Directness” has been considered to be incorrect and was rejected by the judicial committee of the privy council in the Wagon Mound Case.

The Test of Reasonable Foresight: The Wagonmound Case

Case: Overseas Tankship (U.K.) Ltd. v. Morts Dock and Engg. Co. Ltd. (1961) –

1. The Wagon Mound, an oil burning vessel, was chartered by the appellants of the Overseas Tankship Ltd. and was taking fuel at Sydney port.

1. At a distance of about 600 feet, the respondents, Morts Dock Company, owned a wharf, where the repairs of a ship including some welding operations were going on.

1. Due to the negligence of the appellant’s servants, a large quantity of oil was spilt on the water and the oil was carried to the respondent’s wharf.

1. About 60 hours thereafter, molten metal from the respondent’s wharf fell on floating cotton waste, which ignited the fuel oil on the water and the fire caused great damage to the wharf and equipment.

1. It was also found that the appellants could not foresee that the oil so spilt would catch fire.

1. The trial court applied the rule of directness and held the Overseas Tankship Ltd. liable. The Supreme Court of New South Wales also followed the Re Polemis rule and mentioning the unforeseeability of damage caused by fire was no defence, held the O.T. Ltd. liable.

It was held that the “The Test of Reasonable Foresight” is a better test.