Remoteness of Damages: Meaning and Example

When someone commits a tort, it has repercussions, and those repercussions may have other repercussions, which could further cause a chain of similar events. The doctrine of the remoteness of damages is a calculation method or test used to determine the losses brought on by wrongdoing or a breach or the amount of the defendant's liability for the previously indicated chain consequences. Through a series of tests, this technique determines the defendant's liability within a reasonable range.

What is the Meaning of Remoteness of Damages?

In tort law, the principle of the remoteness of damage relates to the notion that a defendant is only accountable for the harm brought on by their acts if that harm was foreseeable at the time of the violation. The defendant cannot be held accountable for injuries that occurred to the plaintiff if they were too far away or unforeseen.

Based on the premise that people should only be liable for the reasonably foreseeable consequences of their acts, this approach serves to guarantee that tort law does not place an excessive or unfair burden on defendants. It establishes a causal link between the defendant's acts and the plaintiff's harm and places a cap on how much of the plaintiff's damages the defendant may be held accountable for. This is why the concept of the remoteness of damage is a crucial part of tort law.

The General Principle

In the Court of Exchequer case of Hadley v. Baxendale, where the plaintiff's mill had stopped operating due to a broken crankshaft, the general theory underlying the notion of the remoteness of injury was established. The manufacturer's ability to restart the mill was delayed because the defendant did not provide the broken crankshaft to the manufacturer in a timely manner.

To recoup the earnings lost due to the mill's delay in being restarted, the plaintiff filed a lawsuit against the defendant. The excessive delay in the delivery of the broken crankshaft to the third party maintained by the court while rejecting the claim should put an end to the mills' profits.

For Example

50 people died after a tiny building collapsed as a result of a drunk driver hitting a truck, which in turn hit the side of the structure. Several people died as a result of the building's collapse and the surrounding area being covered in debris.

So, in the aforementioned illustration, it is clear how a single mishap resulted in several effects, even though the defendant neither intended nor comprehended them beforehand. Consequently, who is to blame for so many deaths in such circumstances? In the case of Liesbosch Dredger v. S.S. Edison, Lord Wright provided the response to this query.

Because it would be impossible for the law to judge the causes of causes or the consequences of consequences, some acts are outside its purview. As a result, the law cannot be held accountable for all the effects of an unlawful act. The law must identify certain implications in the complex web of events as important, possibly not for reasons of pure logic but merely for pragmatic ones.

In the end, the jury decided that the defendant would only be held responsible for the immediate consequences of his wrongdoing and not for any future ones.

Test of Remoteness of Damages

There are two types of the remoteness of damages are −

Test of Reasonable Foresight

A reasonable person may predict the repercussions of wrongdoing; therefore, those consequences are not too far away. The effects are too far off if, on the other hand, a reasonable person could not have predicted them. And only for effects that are not too far off or that may be predicted can a person be held accountable.

Re Polemis Case (1921)

In terms of the directness test, this case was a significant ruling. The standard of reasonable anticipation was ruled to be relevant by the court of appeals, but the test of directness was later upheld by the privy council. According to the facts of this case, the charterers of a ship hired the defendant to unload it. Carelessly dropping a plank into a hold caused sparks to fly with the gasoline and chemicals they were supposed to be offloading.

As a result of the sparks, gasoline and chemical fires spread throughout the ship. In the end, it was decided that even though they could not have predicted that the ship would be destroyed by the careless dumping of a board, they were nevertheless found to be responsible because the fire was a direct result of their negligence.

Test of Directness

According to the directness test, a person is responsible for all direct effects of their wrongdoing, regardless of whether they were foreseen or not, because they are not too far away.

Wagon Mound Case

The Wagon Mound Case, also known as the Overseas Tankship (UK) Ltd. v. Morts Dock and Engg. Co. Ltd. case, brought the test of foreseeability back into the spotlight for judges after it had fallen out of favour for a while due to the test of directness.

Facts

At Sydney Harbour, the Wagon Mound was berthed at a wharf. Oil spilled into the sea as a result of carelessness, mixed with the flotsam, and floated to another wharf where a ship was being repaired by welding. The oil caused the flotsam to catch fire, igniting the wharf. The wharf's owner asserted that he had been injured.

According to the Re Polemis case precedent, the Supreme Court found the appellants responsible, but when the case was heard by the Privy Council, the SC's decision was overturned and Re Polemis was deemed inappropriate for further consideration. The damage to the respondent's wharf was determined to be beyond the control of the appellants. Hence, forty years later, the Privy Council rejected the directness standard that had been maintained in the Re Polemis case.

Conclusion

For determining how much compensation should be awarded after a breach or wrongdoing, the doctrine of the remoteness of damage is employed. The misbehavior may result in a variety of indirect effects that can be classified into two groups: immediate and indirect. The only effects for which the defendant will be found accountable are those that are proximate.

The tests of directness and predictability separate them into these groups. Today, it is believed that the test of foreseeability is more important than the test of directness because a person should only be held accountable for the likely outcomes of his violation.

Frequently Asked Question

Q1. Is remoteness a scope of liability?

Ans. The law of remoteness, which mainly restricts a defendant's duty to the results of their negligence that were foreseeable, and the law relating to novus actus interventions are the two most well-known limitations on a defendant's liability for recklessly inflicted harm.

Q2. What is the remoteness of damages in the Indian Contract Act section?

Ans. The legal criteria used to establish whether the kind of harm brought on by contract violation can be compensated by awarding damages is known as the remoteness of damages.

Q3. What is the test for remoteness of damage in tort?

Ans. If the type of loss you have experienced was reasonably foreseeable by the Defendant at the time of the breach, that is the current standard for the remoteness of damage. In a negligence case, the remoteness test is crucial since it may have an impact on how the claim turns out.