Factual and Procedural Background
This case concerns an insurance claim submitted by the Defendant and declined by the Claimant insurer. The damage at issue arose from an unexploded bomb dropped by hostile German forces in 1942 in The City of Exeter. The bomb remained undiscovered until 2021 when it was unearthed during building works adjacent to the Defendant's campus. Bomb disposal experts determined that the bomb could not safely be transported and should be detonated in situ, which caused damage to nearby buildings.
The Claimant insurer issued a policy to the Defendant on 1 April 2020. The Defendant submitted a claim for physical damage to student halls of residence and business interruption. The Claimant declined the claim on the basis that the loss was excluded under the War Exclusion clause of the policy, which excludes loss "occasioned by war".
Part 8 proceedings were issued by the Claimant on 26 January 2022 seeking declarations that it was entitled to decline the claim. The procedural history is unusual, with the parties agreeing to proceed under Part 8 despite some procedural irregularities, and the facts being agreed without evidence filed. The central issue before the court is whether the damage was "occasioned by war" and thus excluded from coverage.
Legal Issues Presented
- Was the damage suffered by the Defendant "occasioned by war" within the meaning of the War Exclusion clause in the insurance policy?
- If there were concurrent proximate causes of the loss, including war and a human act, does the War Exclusion clause apply by operation of the concurrent causes rule?
- Does the insurance policy exclude or oust the operation of the concurrent proximate causes rule in relation to the War Exclusion clause?
- What is the proper interpretation and application of the concept of "proximate cause" in the context of this insurance claim?
- Does the contra proferentem rule apply to resolve any ambiguity in the War Exclusion clause against the Claimant insurer?
Arguments of the Parties
Claimant's Arguments
- The proximate cause of the loss was the dropping of the bomb, an act of war, which excludes the claim under the War Exclusion clause.
- Alternatively, the dropping of the bomb was "a" proximate cause among others, and under the concurrent causes rule, the exclusion applies if one cause is excluded.
- The human act of detonating the bomb is reasonable and does not negate the proximate cause being war.
- The policy language and established legal principles support the application of the exclusion.
Defendant's Arguments
- The proximate cause of the loss was the deliberate act of the bomb disposal team in detonating the bomb, not the original dropping of the bomb.
- The parties did not intend for the War Exclusion clause to apply to historic wars occurring decades before the policy period.
- This is not a concurrent cause case; if it were, the concurrent causes rule is ousted by the express terms of the policy.
- Reliance on the contra proferentem rule to construe any ambiguity in the War Exclusion clause against the Claimant insurer.
- Additional points regarding the language of the exclusion, objective intention of parties, and purpose of the exclusion were raised but are secondary.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Wayne Tank and Pump v Employers Liability Assurance Corp. [1974] QB 57 |
Concurrent causes rule in insurance law: if one proximate cause is excluded, exclusion applies. |
Supported the Claimant's argument that the exclusion applies where war is one of concurrent proximate causes. |
| FCA v Arch [2021] UKSC 1 |
Interpretation of proximate cause; proximate cause as a matter of common sense; application of concurrent causes rule. |
Provided the framework for proximate cause analysis and concurrent causes rule applied in this case. |
| Brian Leighton (Garages) Limited v Allianz [2023] EWCA Civ 8 |
Clarification of concurrent causes rule and exclusion from cover vs. exclusion from liability distinction. |
Supported the court’s view that exclusions define scope of cover, not liability, relevant to contra proferentem application. |
| Reischer v Borwick 1894 2 QB 548 |
Proximate cause can be an earlier cause even if subsequent human intervention occurs; reasonable human acts do not negate causation. |
Used to illustrate that reasonable human intervention does not sever proximate cause. |
| Leyland Shipping Company v Norwich Union Fire Insurance Society Limited [1918] AC 350 |
Proximate cause analysis ignoring reasonable human intervention; rejection of "microscopic" causation analysis. |
Applied to reject the Defendant’s argument that detonation was sole proximate cause, affirming war as proximate cause. |
| JJ Lloyd Instruments Ltd v Northern Star Insurance Co Ltd (the Miss Jay Jay) [1987] 1 Lloyds Rep 32 |
Concurrent proximate causes of equal or near equal efficiency in insurance claims. |
Supported the court’s alternative finding on concurrent proximate causes. |
| Yorkshire Dale Steamship Co Ltd v Minster of War Transport [1942] AC 691 |
Common sense approach to proximate cause; causation as understood by ordinary persons. |
Reinforced the practical, non-philosophical approach to proximate cause adopted by the court. |
Court's Reasoning and Analysis
The court began by identifying the central legal question: whether the damage was "occasioned by war" under the insurance policy's War Exclusion clause. The court emphasized that this involved determining the proximate cause of the loss, applying established principles of insurance law and contract interpretation.
The court reviewed relevant case law, notably Arch, Reischer, and Leyland Shipping, which establish that proximate cause is a question of common sense focused on the dominant or efficient cause, not necessarily the closest in time, and that reasonable human interventions do not necessarily break the chain of causation.
Applying this framework, the court considered whether the human act of detonating the bomb could be ignored as a reasonable intervention. If so, the proximate cause was clearly the original dropping of the bomb, an act of war. If not ignored, the court found that the dropping of the bomb remained the dominant cause due to the bomb's presence necessitating the detonation and providing the explosive force.
The court rejected the Defendant's argument that the passage of time diminished the causal potency of the bomb or that the detonation was the "agency of change" that alone caused the damage. The court found no evidence that the bomb's explosive capacity had diminished materially over time.
In the alternative, if the dropping of the bomb was "a" proximate cause rather than "the" sole proximate cause, the court applied the concurrent causes rule, which dictates that if one cause is excluded (war), the exclusion applies to the claim.
The court examined whether the policy excluded the concurrent causes rule in the War Exclusion clause. Finding no express wording to that effect, and considering the policy as a whole, the court concluded the rule was not ousted. The court preferred the Claimant's interpretation that certain other clauses expressly reference the concurrent causes rule, whereas the War Exclusion clause does not, indicating no disapplication.
The Defendant's reliance on the contra proferentem rule was rejected because there was no ambiguity in the clause's meaning; the parties agreed on the interpretation, and the exclusion defines the scope of cover rather than excluding liability once cover exists.
Holding and Implications
The court held that the dropping of the bomb was the proximate cause of the loss, and as the dropping of the bomb was an act of war, the War Exclusion clause applies. Consequently, the Claimant insurer is entitled to decline the Defendant's claim.
Alternatively, if the dropping of the bomb was only one of concurrent proximate causes, the concurrent causes rule applies, resulting in the exclusion of coverage.
The court found no basis to disapply the concurrent causes rule in the War Exclusion clause and rejected the Defendant's contra proferentem argument.
The decision disposes of the claim in favor of the Claimant insurer. The court did not set new precedent but applied established principles of proximate cause, contract interpretation, and insurance law to the facts.