Establishing “Proximate Cause” – lessons from Allianz Insurance PLC v The University of Exeter [2023] EWHC 630

There can be multiple potential causes of loss or damage, arising along a ‘chain of causation’. In those circumstances, when assessing policy coverage, it is important to know where / when the chain starts and ends. In Allianz Insurance PLC v The University of Exeter [2023] EWHC 630, the English High Court ruled that a bomb that was dropped 79 years ago was still a proximate cause of the loss, triggering the policy’s war exclusion clause. The judgment reiterates the fundamental principles of causation and the test that an English court will apply.

Background

A bomb dropped on Exeter, England in 1942 during the Second World War was only excavated in 2021 when the University of Exeter undertook building works. As the bomb could not be safely transported, a decision was made to detonate it onsite. The detonation caused some damage to the University’s property. The University submitted a claim to their insurer, Allianz for that property damage.

Allianz declined the claim on the basis that the policy’s war exclusion clause applied and sought the court’s declaration that it was entitled to do so. To determine if the damage was “occasioned by war” (as per the war exclusion), the court had to consider whether the dropping of the bomb in 1942 was a proximate cause of the damage occurring in 2021. 

Judgment

Enquiries into the proximate cause cannot be based on an “unguided gut feeling” but rather a common-sense approach. Where a loss is occasioned by more than one cause, the court emphasised that:

• The courts do not simply look at what the “immediate” or last cause was. Instead, the court’s focus is on the “real” cause.
• Even if a subsequent cause is of such potency that the loss would not have happened without it, the earlier cause might still remain the proximate cause.

Applying the above principles, the court rejected the University’s argument that the recent detonation should be the proximate cause; the University argued that without the detonation in 2021 the premises would not have been damaged. The court emphasised that the “proximity” of a cause to the damage is not confined to its proximity in time to that damage. Even though the bomb was dropped 79 years ago, the passage of time did not affect the proximate cause consideration. As the dropping of the bomb was an “act of war”, the war exclusion clause applied.

For completeness, the court also considered that even if the dropping of the bomb was not “the” proximate cause, it was still “a” proximate cause. 

Where it cannot be said that one of the two or more possible causes made the loss inevitable, this gives rise to a situation of “concurrent proximate causes”. The general rule is that where one of the concurrent proximate causes is excluded from cover but the other is not, the exclusion will prevail. Accordingly, the court found that the war exclusion clause applied and would prevail over any other insured peril.  

Our Comments

When assessing claims, it is not uncommon for there to be more than one cause of loss or damage. In analysing the chain of causation, insurers should not just focus on what was the most immediate cause to the damage. Instead, a common sense approach should be adopted to assess the real cause of the loss.