Remoteness of damage is an interesting principle especially when analyzing two specific cases. They are apparently allocated in different areas of law, functioning in England and Wales. In first case claimant is Overseas Tankship (UK) Ltd and brings a sui
Remoteness of damage is an interesting principle especially when analyzing two specific cases. They are apparently allocated in different areas of law, functioning in England and Wales. In first case claimant is Overseas Tankship (UK) Ltd and brings a suit against Morts Dock and Engineering Co Ltd. The case lays down principles relating to negligence in law of tort, more precisely remoteness of damage. Second case Hadley v Baxendale is sequentially leading case on remoteness of damage in contract law. This principle links these two cases together and also demonstrates differences between them. According to Oxford dictionary of law remoteness of damage is “the extent to which a defendant is liable for the consequences of his wrongful act or omission.” Cases mentioned above will be presented in light of this significant principle, which limit the types of loss that are recoverable.
First of all the facts of the cases are relevant to present principles in area of tort and contract law. The Wagon Mound No 11case is about the defendant's vessel, The Wagon Mound. It discharged furnace oil into Sydney Harbour. The wind and tide carried the oil beneath Claimant's wharf where on by Claimant's employees welding operations were being carried. Claimant's employees continued their work after being advised that they could safely weld. After about 55 to 60 hours the original discharge, molten metal set some waste floating in the oil on fire. The flames quickly developed into a large fire which spread rapidly causing destruction of some boats and the wharf.
Liability turned on the question of whether the damage was foreseeable, since furnace oil has such a high boiling point it is unlikely to catch fire under normal circumstances. Answer is no because the defendant could not foresee that the oil discharged would be ignited when a piece of molten metal would fall upon a floating piece of cotton. Therefore it was held that defendant was not liable for the fire but liable for the fouling. Liability is founded on the consequences not the action involved.
The decision in this case was relied on the test which is based on requirement that the damage must be of a foreseeable type. According to Harpwood in negligence claims claimant has to establish that the defendant owes them a duty of care and is in breach of that duty. Then he also needs to demonstrate that the damage caused was not too remote. Originally a defendant was liable for all losses which were a direct consequence of the defendant’s breach of duty. Harpwood informs that it is called direct consequence test. This problem presents following case: Re Polemis & Furness Withy & Company ltd. The decision was considered unfair when defendant could be liable for damage which was not foreseeable and therefore he/she could not take steps to prevent it. For that reason decision was overruled in the Wagon Mound No 1 and replaced with a new test for deciding if damages are too remote. Interesting how courts followed the reasonable foreseeability test established in Wagon Mound No 1 case. The test was considered and applied in Hughes v Lord Advocate. Cook declares that „the key to the Wagon Mound test is what is meant by a kind of damage.” The defendant is only liable for damage that is of a kind which is reasonably foreseeable. In Hughes v Lord Advocate the type of damage which has to be foreseeable type was not too remote. The House of Lords ruled that the plaintiff was able to claim damages for negligence. What was the reason? The Lords viewed the type of harm as the important factor. It did not matter whether the explosion was foreseeable. Consequently, as Harpwood relates: in essence, that people might suffer burns was the issue of foreseeability. On the other hand in Doughty v Turner Manufacturing Company the damage was too remote. It was not foreseeable that an explosion would occur. Harpwood10 gives entirely different explanation of the phenomenon. Whilst it may be foreseeable the lid may have caused a splash resulting in a scold. It was not foreseeable that an eruption would take place resulting in burns. Another problem is related to confusion as to whether in addition to being damage of a type which is foreseeable, the damage must occur in a foreseeable manner. Hughes v Lord Advocate case suggests not but in Tramain v Pike case circumstances were different. A herdsman discovered Weil's disease during his work on the defendant’s farm. The herdsman sued in negligence. The kind of damage suffered namely infection with a rare disease was seen as entirely different to what might be reasonably foreseen and that might result from a rat-bite. The defendant was not held liable because he could not foresee the risk of the initial infection (Cook). In the Court of Appeal awards damages to a soldier who, while off duty and drunk, fell from a moving army lorry. His initial case was dismissed because his actions were considered not to be foreseeable. On appeal his case was upheld, it was found that he was owed a duty of care, even in his drunken state, and that his actions were foreseeable (Harpwood). The House of Lords in Jolley v Sutton London Borough Council confirms both that a special duty of care is owed to children and that the rules of foreseeability do not require the precise manner of an injury or its extent to be foreseeable. The test is: "Was the wider risk, which would include within its description the accident which actually happened, reasonably foreseeable?"
