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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> University of Exeter v Allianz Insurance PLC (Rev1) [2023] EWCA Civ 1484 (14 December 2023) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2023/1484.html Cite as: [2024] 2 All ER 663, [2024] 2 All ER (Comm) 743, [2023] EWCA Civ 1484 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT
HHJ Bird (Sitting as a High Court Judge)
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE COULSON
and
LORD JUSTICE SNOWDEN
____________________
The University of Exeter |
Appellant |
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- and - |
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Allianz Insurance PLC |
Respondent |
____________________
Isabel Hitching KC (instructed by DAC Beachcroft LLP) for the Respondent
Hearing date: 7 November 2023
____________________
Crown Copyright ©
LORD JUSTICE COULSON :
1. Introduction
2. The Agreed Facts
3. The Insurance Policy
"Indemnify or otherwise compensate the insured against loss, destruction, damage, injury or liability (as described in and subject to the terms, conditions, limits and exclusions of this policy or any section of this policy) occurring or arising in connection with the business during the period of insurance or any subsequent period for which the insurer agrees to accept a renewal premium."
"War (Not applicable to the Computer, Engineering Machinery Damage, Engineering-Business Interruption, Employers' Liability, Personal Accident, Business Travel, Terrorism, Fidelity Guarantee, Cyber and Directors and Officers Sections) Loss, destruction, damage, death, injury, disablement or liability or any consequential loss occasioned by war, invasion, acts of foreign enemy, hostilities (whether war be declared or not), civil war, rebellion, revolution, insurrection or military or usurped power." (Emphasis added)
4. The Claim and the Proceedings
5. The Judgment Below
"41. Applying the guidance set out in Arch, I remind myself that the test of "proximate cause" is a matter of judgment based on common sense rather than over-analysis. It is open to me to conclude that one or other of the dropping of the bomb and the detonation of the bomb was "the" sole proximate cause or that each was "a" proximate cause. No further potential candidate for "proximate cause" is proposed.
J. Can the human intervention (detonation) be ignored?
42. If I leave out of account the reasonable human act of detonating the bomb (on the basis of the general guidance set out in Arch), I am driven to the conclusion that the dropping of the bomb was the proximate cause of the loss. It is the only remaining option.
43. Arch however does not set down a firm and fixed rule that human intervention is to be ignored. Human actions are simply "not generally" regarded as new causes. To determine if the general guidance applies, I need to consider what part if any the detonation played in the causal "net".
K. If the human intervention (detonation) is not simply ignored
44. If, rather than simply ignoring the human intervention, I consider the "net of causation" and look at the "influences, forces and events" which converged at the point of loss, concentrating on the character of those events rather than the chronological order in which they occurred, then I would in any event conclude that the dropping of the bomb was the proximate (dominant or efficient) cause of the loss.
45. The common sense analysis is this: the loss was caused by an explosion. The explosion was triggered by the reasonable (and indeed obviously correct) decision to detonate the bomb. That decision was necessitated by the presence of the bomb. If there had been no bomb, there would have been no explosion. The bomb provided both the explosive payload and the absolute need for the detonation. In my view, the dropping of the bomb was the obvious proximate cause of the damage.
46. If the bomb had exploded when it landed (and if the damaged buildings had been there) the conclusion that the bomb was the proximate cause of the damage would have been inevitable. Does the reasonable and necessary human act of detonating the bomb change that analysis? In my view it does not. It is the presence of the bomb that leads to both the need for the detonation and the inevitability of the damage. As a matter of common sense, the dropping of the bomb and its consequent presence at the site, was the proximate cause of the damage."
"54. If I am wrong to conclude that the dropping of the bomb was the proximate cause of the loss then, applying the Arch guidance, the combined effect of the detonation and the bomb made the damage inevitable. If the analysis that led me to conclude that the dropping of the bomb was "the" concurrent cause was wrong, the alternative analysis must be that the damage was (as a matter of common sense) caused by the combined effect of the detonation and the presence of the bomb. If my conclusions above are wrong then I am driven to the conclusion that the detonation and the presence of the bomb were "equal, or at least nearly equal" in their efficiency.
…
56. As a result of my alternative finding that the dropping of the bomb is "a" proximate cause of the damage, it follows that (subject to Mr Pliener's argument that the rule is ousted by the policy) by operation of the concurrent proximate causes rule, the exclusion applies."
This last reference was to an argument as to the construction of the exclusion clause advanced by Mr Pliener KC at first instance, but not pursued on appeal.
6 The Law Concerning Causation
6.1 Proximate Cause: General Principles
"165. During the 19th century, however, a different concept derived from Aristotle's notion of an "efficient" cause, meaning something that is the agency of change, became increasingly influential. Ultimately, this concept supplanted the idea that the law is concerned with the immediate cause of loss, although in insurance law the expression "proximate cause" was retained."
They then referred to both Reischer and Leyland and, at [166], said this:
"166. This decision [Reischer] was approved by the House of Lords in the leading case of Leyland... The facts were materially similar to those of Reischer... A ship torpedoed by a German submarine was towed to the nearest port but had to anchor in the outer harbour exposed to the wind and waves. After three days the ship sank. The ship was insured against perils of the sea but there was an exception in the policy for "all consequences of hostilities or warlike operations". The House of Lords affirmed the decision of the lower courts that the loss was proximately caused by the torpedo, which was a consequence of hostilities, and was therefore not covered by the insurance. By far the fullest discussion of the concept of proximate cause is contained in the speech of Lord Shaw of Dunfermline. He made it clear, first of all, that the test of causation is a matter of interpretation of the policy and that "[t]he true and the overruling principle is to look at a contract as a whole and to ascertain what the parties to it really meant" (see p 369). He went on to say:
"What does 'proximate' here mean? To treat proximate cause as if it was the cause which is proximate in time is … out of the question. The cause which is truly proximate is that which is proximate in efficiency. That efficiency may have been preserved although other causes may meantime have sprung up which have yet not destroyed it, or truly impaired it, and it may culminate in a result of which it still remains the real efficient cause to which the event can be ascribed.""
"168 The common-sense principles or standards to be applied in selecting the efficient cause of the loss are, however, capable of some analysis. It is not a matter of choosing a cause as proximate on the basis of an unguided gut feeling. The starting point for the inquiry is to identify, by interpreting the policy and considering the evidence, whether a peril covered by the policy had any causal involvement in the loss and, if so, whether a peril excluded or excepted from the scope of the cover also had any such involvement. The question whether the occurrence of such a peril was in either case the proximate (or "efficient") cause of the loss involves making a judgment as to whether it made the loss inevitable - if not, which could seldom if ever be said, in all conceivable circumstances - then in the ordinary course of events. For this purpose, human actions are not generally regarded as negativing causal connection, provided at least that the actions taken were not wholly unreasonable or erratic."
6.2 Concurrent Causes: General Principles
"174. This situation is to be contrasted with one where there are two proximate causes of loss, of which one is an insured peril but the other is expressly excluded from cover under the policy. Here, although it is always a question of interpretation, the exclusion will generally prevail: see Wayne Tank and Pump Co Ltd v Employers Liability Assurance Corpn Ltd [1974] QB 57; Midland Mainline Ltd v Eagle Star Insurance Co Ltd [2004] EWCA Civ 1042; [2004] 2 Lloyd's Rep 604; Atlasnavios-Navegação, LDA (formerly Bnavios-Navegação, LDA) v Navigators Insurance Co Ltd (The B Atlantic) [2018] UKSC 26; [2019] AC 136, para 49."
"175. In none of the cases in either of these categories that were cited in argument could it be said that either cause which was characterised as a proximate cause on its own rendered the loss inevitable in the ordinary course of events. In each case it was the combination of the two causes which together made the loss inevitable. Neither would have caused the loss without the other.
176. There is, in our view, no reason in principle why such an analysis cannot be applied to multiple causes which act in combination to bring about a loss…."
6.3 Potentially Analogous Cases
"There has to be a close link between the loss and the fact of war, and damage arising from dislocation which has been facilitated by the war would be too remote to be regarded as having been caused by war. A loss which has occurred after the suspension of hostilities cannot be said to have been proximately caused by war". (My emphasis)
Two authorities are cited in the footnote as supporting this italicised passage: Shneiderman v Metropolitan Casualty Co. 220 N.Y.S.947 (1961) and Pan American World Airways Inc v Aetna Casualty and Surety Co. [1975] 1 Lloyd's Rep 77. I derive no assistance from Pan American World Airways because the principal reason that the claim failed in that case was because the hijacking was not connected to anything that could be described as a "war". In Schneiderman, the insured was a photographer/journalist who was covering the Suez crisis in 1956. Hostilities ceased on November 6 1956. The insured was killed 4 days later, attempting to cross from the British-French lines to the Egyptian side with a party exchanging wounded. The court concluded that the exclusion clause in respect of war did not apply because the cessation of hostilities was synonymous with the cessation of war.
7. Ground 3: The Proper Interpretation of the Policy
8. Concurrent Causes of the Loss and Damage
8.1 Introduction
8.2 The Procedural Point
8.3 The Substantive Point
8.4 Ground 1: "Inevitability"
8.5 Ground 2: "Agency of Change"
8.6 Ground 4: No Reasonable Judge Could Have Reached The Concurrency Conclusion
8.7 Summary
9. The Judge's Analysis of Sole Cause
10. Conclusion
LORD JUSTICE SNOWDEN
LORD JUSTICE LEWISON