Remoteness in English law

In English law, remoteness is a set of rules in both tort and contract, which limits the amount of compensatory damages for a wrong.

In negligence, the test of causation not only requires that the defendant was the cause in fact, but also requires that the loss or damage sustained by the claimant was not too remote. As with the policy issues in establishing that there was a duty of care and that that duty was breached, remoteness is designed as a further limit on a cause of action to ensure that the liability to pay damages is fairly placed on the defendant.

The traditional approach was that once a breach in the duty of care had been established, a defendant was liable for all the consequent damage no matter how unusual or unpredictable that damage might be. In Re Polemis while docked, workers employed to unload the ship negligently dropped a plank into the hold, which struck something, causing a spark that ignited petrol vapour lying in the hold. The fire destroyed the whole ship. The Lords held that although the fire was not a reasonably foreseeable consequence of the plank falling, there had been a breach of the duty of care and all damage representing a direct consequence of the negligent act was recoverable. It was determined that once some harm was foreseeable, the defendant would be liable for the full extent of the harm. That particular consequences are possible does not make them reasonably foreseeable. This will particularly be the case when there are a significant number of links constituting the chain. The more links, the less likely that consequence may be considered reasonably foreseeable.

However, in the The Wagon Mound (No 1) a large quantity of oil was spilt into Sydney Harbour from the Wagon Mound and it drifted under the wharf where the claimants were oxyacetylene welding. The resulting fire caused extensive damage to the wharf and to vessels moored nearby. The Privy Council replaced the direct consequence test with the requirement that, in order to be recoverable, damage must be foreseeable in all the circumstances, thus, although pollution was a foreseeable consequence of the spillage, an outbreak of fire was not. Viscount Simonds held at pp 422–423:

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