Meaning & Definition

Remoteness of damage refers to the legal principle that limits a defendant’s liability for consequences of their wrongful act. It addresses how far liability extends for the chain of consequences flowing from a tort. The law does not hold a defendant liable for all consequences no matter how remote or unforeseeable. A line must be drawn somewhere to limit liability on practical grounds.

As Lord Wright stated “The Law cannot take account of everything that follows a wrongful act; it regards some subsequent matters as outside the scope of its selection because it were infinite for the law to judge the causes of causes or consequences of consequences.“

The principle of remoteness determines which consequences are too remote to be compensated and which are sufficiently proximate for the defendant to be liable. It limits liability to consequences that have a close causal connection to the wrongful act.

Historical Background

The remoteness principle developed as courts recognized the need to place reasonable limits on tort liability. Two main tests emerged historically:

1. The test of reasonable foresight: Liability limited to consequences a reasonable person could foresee.
2. The test of directness: Liability for all direct consequences whether foreseeable or not.

These competing approaches were reconciled in the landmark Wagon Mound case in 1961 which established reasonable foreseeability as the primary test.

Test of Reasonable Foresight

Under this test a defendant is liable only for consequences that could have been reasonably foreseen by a reasonable person in their position. Unforeseeable consequences are considered too remote.

This test was articulated in cases like Rigby v. Hewit and Greenland v. Chaplin. It limits liability to foreseeable harm rather than all possible consequences no matter how unlikely.

The reasonable foresight test aims to strike a balance between compensating victims and not imposing excessive liability on defendants for highly improbable consequences.

Test of Directness

The directness test holds defendants liable for all direct consequences of their wrongful act whether foreseeable or not. It focuses on the chain of causation rather than foreseeability.

This test was applied in Re Polemis and Furness Withy & Co Ltd. The court held that once an act is negligent the defendant is liable for all direct consequences even if the exact result was not foreseeable.

The directness test imposes broader liability than the foreseeability test. It was ultimately rejected as the primary test for remoteness.

The Wagon Mound Case

The seminal case of Overseas Tankship (UK) Ltd v Morts Dock and Engineering Co Ltd (The Wagon Mound) in 1961 marked a turning point. It rejected the directness test and firmly established reasonable foreseeability as the proper test for remoteness.

Facts: The defendant’s ship leaked oil into Sydney Harbour. The oil drifted to the plaintiff’s wharf. Sparks from welding ignited the oil damaging the wharf. The defendant could not foresee the oil catching fire.

Issue: Whether the defendant was liable for the fire damage which was not reasonably foreseeable.

Held: The Privy Council held the defendant was not liable as the fire damage was not reasonably foreseeable. It rejected the directness test from Re Polemis.

The court ruled that a defendant is liable only for damage of a type that was reasonably foreseeable even if the extent of damage was greater than expected. Unforeseeable types of damage are too remote.

Key Principles from Wagon Mound:

1. Reasonable foreseeability is the proper test for remoteness of damage.
2. A defendant is liable only for damage of a type that was reasonably foreseeable.
3. The defendant need not foresee the exact manner or extent of damage.
4. Unforeseeable types of damage are too remote to be compensated.
5. The directness test from Re Polemis was rejected as unsound.

The Wagon Mound case established a narrower scope of liability based on foreseeability rather than mere directness of consequences. It aimed to achieve a fairer balance between compensating victims and limiting excessive liability.

Application in Subsequent Cases

The reasonable foreseeability test from Wagon Mound has been consistently applied in subsequent cases:

Hughes v Lord Advocate (1963): A child was injured when a paraffin lamp exploded in an unguarded manhole. Held: The defendants were liable as some injury from the lamp was foreseeable even if the exact manner was not.

Doughty v Turner Manufacturing Co (1964): An asbestos lid fell into molten metal causing an unexpected chemical reaction and explosion. Held: The explosion was unforeseeable so the defendants were not liable for that damage.

S.C.M. (United Kingdom) Ltd v W.J. Whittall & Sons (1971): A damaged cable cut power to a factory. Held: Loss of production was foreseeable so defendants were liable.

These cases show courts applying the foreseeability test to determine whether particular consequences were too remote.

Essentials of Remoteness

The key elements in applying the remoteness principle are:

1. There must be a wrongful act by the defendant.
2. The wrongful act must cause some damage to the plaintiff.
3. The court must determine if the particular damage claimed was reasonably foreseeable.
4. Damage of an unforeseeable type will be considered too remote.
5. The defendant need not foresee the precise details or extent of damage.
6. Once damage of a type is foreseeable the defendant is liable for the full extent.
7. The test is objective based on what a reasonable person would foresee.
8. Foreseeability is judged at the time of the wrongful act not with hindsight.

Types of Damage

Courts distinguish between different types of damage in assessing remoteness:

1. Physical Injury: Generally more foreseeable and recoverable.
2. Property Damage: Often foreseeable especially to nearby property.
3. Economic Loss: May be too remote unless closely tied to physical damage.
4. Psychiatric Harm: Recoverable if a recognized psychiatric illness results.

The type of damage claimed affects whether it will be considered reasonably foreseeable or too remote.

Exceptions and Limitations

Some exceptions and limitations to the remoteness principle include:

• Egg-shell skull rule: The defendant must take the victim as they find them.
• Novus actus interveniens: An unforeseeable intervening act may break the chain of causation.
• Intentional torts: A wider range of consequences may be recoverable for intentional wrongs.
• Statutory liability: Legislation may impose liability without the usual remoteness limits.

These rules can affect the application of remoteness in particular cases.

Procedure for Assessing Remoteness

Courts follow this general procedure in applying the remoteness principle:

1. Identify the wrongful act of the defendant.
2. Determine what damage resulted from that act.
3. Assess whether that type of damage was reasonably foreseeable.
4. If foreseeable the defendant is liable for the full extent of damage.
5. If unforeseeable the damage is too remote and not recoverable.
6. Consider any relevant exceptions or limitations.

The onus is on the defendant to prove the damage was too remote if that is raised as a defense.