Elementary My Dear Watson? Causation And The Burden Of Proof

Would Sherlock Holmes have been a reliable claims handler? A recent decision by the Court of Appeal suggests not - and they did not think much of Hamlet either.

The Court of Appeal has had occasion twice this year to consider the test required to discharge the burden of proof for civil liability. Nulty v Milton Keynes Borough Council [2013] Lloyd's Rep IR 243 involved a dispute as to the cause of a fire at a recycling plant. Ace European Group v Chartis Insurance UK [2013] EWCA Civ 224 concerned the cause of serious cracks in components for an 'energy from waste facility' that was under construction. Both appeals were dismissed because it was held that the judges at first instance had reached conclusions that were available to them on the facts. However, in Nulty the Court of Appeal held that Mr Justice Edwards-Stuart had erred in holding that if the only other possible causes of a loss were very much less likely, by process of elimination the remaining hypothesis became in law the probable cause, however unlikely it might otherwise appear. Both decisions applied the House of Lords decision in the Popi M [1985] 2 Lloyd's Rep 1 that a finding on the balance of probabilities that a particular event was causative of the loss required the case for believing that the event occurred to be more compelling than the case for not so believing. It was not sufficient that the cause put forward was merely the most plausible of a number of improbable explanations.

Analysis

In Nulty the appellant, the estate of a deceased self-employed electrical engineer (and his liability insurers), appealed against the High Court's decision that a serious fire at a recycling centre owned by the Council had been caused by a discarded cigarette dropped by Mr Nulty when he was alone on the site investigating the cause of a power outage. In his decision at first instance, Edwards-Stuart J had painstakingly considered the possible causes of the fire, which the Council contended was a discarded cigarette dropped by Mr Nulty and which Mr Nulty's estate argued was 'arcing' from a disused electric cable that had been left live and in a dangerous condition. On the expert evidence the judge concluded that the latter theory was most improbable. By contrast, he found that there was nothing physically or scientifically implausible about the cigarette end explanation, however, he accepted the objection to this theory that the engineer would not have been expected to behave in such a...