The following Dispute Resolution practice note Produced in partnership with Zainab Hodgson and Kavidha Clare of CMS provides comprehensive and up to date legal information covering:
When considering a claim for damages (see Practice Note: Contractual damages—general principles and related content), the court will consider the principles of causation and remoteness.
A party's duty to mitigate its loss is dealt with in Practice Note: Mitigation in contractual breach claims.
For guidance on causation in professional negligence claims, see Practice Note: Causation and remoteness in professional negligence claims.
For guidance on causation and remoteness in tort claims, see Practice Notes: Tort claims—causation as a matter of fact and Tort claims—causation in law.
Note: issues of causation and the ‘but for’ test in the specific context of insurance policy wording are outside the scope of this Practice Note but were considered in detail in the coronavirus (COVID-19) prompted test case of The Financial Conduct Authority (FCA) v Arch Insurance (UK) Ltd, with the decision illustrating the importance of focussing in on the key question in ‘but for’ causation, namely, ‘but for what’ precisely? For further details see News Analysis: Coronavirus (COVID-19) business interruption test case (post-judgment analysis) construction, composite perils and causation.
Causation is not a limit to recoverability, you need to establish causation to found a claim. Liability is limited to consequences, which are attributable to the wrongful act or breach of contract, ie there must be a causal connection between the breach and the loss sustained.
The traditional 'but for'
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