It is a concept which has been widely debated, and to this day, remains somewhat ambiguous. However the recent case of Sylvia Shipping Co Ltd v Progress Bulk Carriers Ltd  EWHC addresses the confusion surrounding the principle of remoteness of damages and has clarified the principles under current case law. Background As mentioned above, it is Hadley v Baxendale which established the remoteness of damages test in contractual disputes, a test which remains the principal tenet of the law on damages in England and Wales. Under this principle the claimant is permitted to recover the following in the event of a contractual breach:
The generally accepted remoteness test was whether the loss claimed was of a kind or type within the reasonable contemplation of the parties at the time the contract was made as not unlikely to result, but at least two of the Law Lords in The Achilleas introduced an assumption of responsibility test that prompted much debate.
In Sylvia v Progress, Mr Justice Hamblen reviewed the House of Lords judgment, subsequent case law and textbook commentary and said that only in relatively unusual cases e.
The Achilleasmight a consideration of assumption of responsibility be required. It was important to make clear that there is no new generally applicable legal test of remoteness in damages.
Decisions are apparently being challenged for failing to recognise or apply the assumption of responsibility test and this results in confusion and uncertainty but in the vast majority of cases tribunals of fact can and should be able to apply the familiar and well established remoteness test which, in those cases, works perfectly well.Peter Aeberli, Barrister and Chartered Architect, is an experienced arbitrator, mediator and adjudicator of construction disputes.
Introduction. A claimant must prove that the damage was not only caused by the defendant but that it was not too remote. The remoteness of damage rule limits a defendant's liability to what can be reasonably justified, ensures a claimant does not profit from an event and aids insurers to assess future liabilities.
|Remoteness of Damage in Torts and in Contracts – Barbra Dozier's Blog||Related Content The term remoteness refers to the legal test of causation which is used when determining the types of loss caused by a breach of contract or duty which may be compensated by a damages award.|
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|Remoteness in English law - Wikipedia||Introduction to Dispute Resolution and Arbitration Overview of dispute resolution methods:|
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The test of remoteness of damage limits this liability by defining certain types of damage or losses as being irrecoverable as a matter of law.
The test is carried out to protect the defendant in breach of their obligations from unusual or unexpected claims. Apr 04, · Remoteness of damage The consequences of a wrongful act may be endless. No defendant can be made liable ‘ad infinitum’ for all the consequences which follows his wrongful act.
For "Remoteness of vesting" see instead Rule against perpetuities.. 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.