Marine Insurance: The Doctrine of Proximate Cause and Insurance against War Risks at Sea. Examples of Causa Proxima. Under the policy, goods have been insured against damage likely to be caused by sea water. The ship was insured under a policy that covered perils of the seas, however excluded war risks. The realm of insurance law is difficult and complex. 0000138690 00000 n 287 24 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. 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. – The syllabus will be based on UK law and practice. If the cause is not fire but some other cause remotely connected with fire, it is not recoverable, unless specifically provided for. )�־!������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 endobj Insurance law is the name given to practices of law surrounding insurance, including insurance policies and claims. 2 In Boon, the policy covered certain goods in a store building. 4 C.P. 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 … If the product turns out to be defective or does not live up to its potential the seller will not be responsible for this. A contract should be simple to be a valid contract. 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. ���7}א���ROxe�E��AZ"\! An insurance contract comes into existence when one party makes an offer or proposal of a contract and the other party accepts the proposal. Definition and Forms of contracts The law of contract is concerned about the legal enforceability of promises. Thus the policy may extend or limit the consequences covered by the policy, e g, by … The right of … 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 Insurance. x��V�n�0}���`��u�ۚ^��k���>t{���ִ[�a�?R�b9�c���R��!y,y~5��K&%�����If4p�Q,������a:�-d��]�L'G�?�ʼ@p�;��� The real cause of the loss must be considered while payment of the loss. %%EOF ��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� � The maxim is “Sed causa proxima non-remota spectature” i.e. Meaning & Definition of Marine Insurance Section 2( C&F ) & 3 of Marine Insurance Act 1963 defines Marine Insurance and includes movables … Causa proxima. Insurance law is the name given to practices of law surrounding insurance, including insurance policies and claims. 0000000016 00000 n Causa Proxima It is a rule of law that in actions on fire policies, full regard must be had to the causa proxima. Principal of utmost good faith: Under this insurance contract both the parties should have faith over each other. But, in many instances, a peril of the sea was itself caused by some act of negligence on the part of the master or crew. <]>> Cf. If the … The action is a necessary condition, but may not be a sufficient condition, for the resulting injury. No abstract provided. Mr.A has taken a marine policyto cover the goods exported by him. This channel is created with an aim to share the legal and technical knowledge with the students and legal fraternity. The policies must all cover the same property and the same event, and all the policies must be in effect and enforceable. Law of Contracts 1.1. 1981, para. 4209 words (17 pages) Law Essay. 0000003425 00000 n 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. <> 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. 1. 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. Presentation PDF Available. y)���`4��>X�?\��(�A#\�ug�:�����:'��Sz� If the proximate cause of the loss is a peril insured against, the Insured can recover. Incidentally A’ may also have comprehensive motor insurance which protects him against such losses. Ivamy, General Principles of Insurance Law, 4th ed., p. 416. 4 0 obj In other case law, Ionides v. Universal Marine Insurance Co. (1863). 0000000776 00000 n The ship was hit by a torpedo and despite the severe damage it still reached the port, where repair work was started. 0000255081 00000 n %PDF-1.5 Re-insurance. This espouses the important doctrine of 'proxima causa', which means that the loss must be connected to, or associated with, its supposed 'cause'. In this case, there are two causes of the mishap. If the real cause of loss is not insured, the insurance company is not liable to indemnify the loss sustained by the insured. 426 in which the Court of Appeal found two separate causes to be concurring causes and reached a similar conclusion. (a.1)Subrogation (a)Doctrine Indemnity (a.2)Contribution (b)Doctrine Insurable Interest. The maxim is “Causa-proxima non remota spectaturs”. Co., 55 Ky. 427 (Ct. App. <>>> ���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. 2. – The April session will test the legal position as of 31st August of the preceding year. The term ‘Subrogation’ in the context of Insurance, has been defined in Black’s Law Dictionary as: “The Principal under which an insurer that has paid a loss under an insurance policy is entitled to all the rights and remedies belonging to the insured against a third party with respect to any loss covered by the policy”. London: The Solicitors' Law Stationery Society, Ltd.1927. During the voyage, a hole was caused at the bottom of the ship. Mr.A has taken a marine policy to cover the goods exported by him. 287 0 obj <> endobj ��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����� Get this from a library! BANKING & INSURANCE: INSURANCE Insurance is a contract to pay compensation in certain eventualities (e.g., death, fire, theft, motor accident) in return for a… The insurance company may still have to pay out a claim if the policy holder's intoxication did not cause the accident. In other words the rule of causa proxima means that the cause of the loss must be proximate or immediate and not remote. A ship was severely torpedoed and was in the process of sinking. Insurance regulation that governs the business of insurance is typically aimed at assuring the solvency of insurance companies. Insurance is the process in which the loses of few are shared by many persons who are equally exposed to same risks. 0000138104 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. At the same time, it can file a law suit against Mr.Tom for $ 1.2 million, the market value of the house. A captain lost his course and took his ship grounded to try to pick out a lighthouse. 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 The real cause of the loss must be considered while payment of the loss. Saqui and Lawrence v. Stearns [1911] 1 K.B. (Price 2s. MrJustice Wright. Norwich Union Fire Insurance Society Ltd (1918) illustrates that the causa proxima may not necessarily be the last event to occur. It is the duty of the buyer to check the quality and the usefulness of the product he is purchasing. Journal of Maritime Law & Commerce, Vol. Almost immediately there was a cyclonic storm and the ship sank. 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 This is very important topic of Insurance Law. This doctrine says that the seller will not be responsible for this. (It is the proximate cause, not the remote cause that should be looked into is still the guiding principle. Contribution Principle Rules. Principle of Causa Proxima (Nearest Cause). 0000096055 00000 n 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. 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. 0000003152 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. See, for example: Montgomery v. Firemen's Ins. 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. Solvency Margin & Insurance … ��V�V�K�?�X�D�~�� If you break (breach) the contract, the other party has several legal remedies. 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. Insurance is the process in which the loses of few are shared by many persons who are equally exposed to same risks. Principle of Causa Proxima (Nearest Cause). ... (Leyland shipping Co. V. Norwich Union Fire … [The] rule to be applied is causa proxima non remota spectatur." %PDF-1.5 %���� 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. 3 0 obj 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. %���� ��� ������4�m `�>.����*��BgSp��$qL�nx�J>�4iW&X4��>Ō^ ���v0}�qg�^Y� The realm of insurance law is difficult and complex. 0000254915 00000 n law has been emphasized in the preceding chapters, both the courts, and especially, a host of legal writers, have also pointed to the need to break with the past and, to retain from it, only that which is defensible. 1.Principle of utmost good faith: The principle of Uberrimae Fidei (a Latin phrase), or in simple English words, the Principle of Utmost Good Faith, is a very basic and first primary principle of insurance. Immediate or proximate means Proximate in efficiency and not necessarily in time. endobj g��&�+"ީ��%Q1),�A5n��US�6�v���䙐1*�XҔ�l]��2��7Ѡ���m�@����I��^KX�ct�v?b>|C��Y"�}�o�A��{�7��%��l�~�#�2�9����+�R��#��̈́ K� ���N��*�T&oڍg\Mt�n� ��n�{ie�_. Insurance Law Essentials Request Demo ... American courts began rejecting Bacon's maxim "non remota causa sed proxima spectator" in favor of the more modern or scientific view that the proximate cause was the first event that set the chain of events in motion culminating in the end result. An arrangement … If the cause is not fire but some other cause remotely connected with fire, it is not recoverable, unless specifically provided for. This com-plexity is due, in part, to the nature and structure of insurance poli-cies and the substance of legal actions brought when a dispute arises between an insurer and an insured. Insurance regulation that governs the business of insurance is typically aimed at assuring the solvency of insurance companies. 0000004956 00000 n 3, July, 2003 Causa Proxima Non Remota Spectatur: The Doctrine of Causation in the Law of Marine Insurance Wan Izatul Asma Wan Talaat* I INTRODUCTION Since every event is the effect of some cause, causation is indeed a sig- nificant part in the law of insurance.' – The October session will test the legal position as of 28th February of the same year. �i#��^����*���a��Ly�NTެ�)��V�|Y��)DL�z��F����Zd�&&_Â�K����j���_C��I����o+$k��Qg7����vR8� The maxim is “Sed causa proxima non-remota spectature” i.e. The term causa proxima means nearest or proximate or immediate cause. 6. �#�i����z��h5����CƩ���@�y_{Ѩ���h04����zf�ւd0 �pS8��Љ@5y�� L� 5 A contract should be simple to be a valid contract. In other words, the insurance company will pay compensation to the insured only when the cause of accident is directly related to the loss. 3. Cause-in-fact is determined by the "but for" test: But for the action, the result would not have happened. ���?���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�� vi) Causa Proxima: In a contract of insurance, the governing rule is the proximate cause to fix the liability of the insurer. 0000005137 00000 n 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. It applies to all insurance contracts, which are contracts of indemnity. trailer see the proximate cause and not the distant cause. The person entering into a contract should enter with his free consent. For example, suppose the night watchman falls asleep in the crow's n… There are two types of causation in the law: cause-in-fact, and proximate cause. 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