the case law illustrates that “directly or indirectly caused by or contributed to” is the
widest causation trigger that can be employed in the context of an exclusion clause.
In Coxe v. Employers’ Liability Assurance Corp Ltd
28 at the beginning of the First
World War, an army officer was killed by a train whilst inspecting his troops who
were guarding the old South East railway near Folkestone. When he was struck by
the train at night he was walking the line at a place where the general public were
prohibited in circumstances where the lights from a nearby signal box had been
dimmed in accordance with the Defence of the Realm Act 1914. The officer had
taken out a life insurance policy which contained an exception “The policy does not
insure against death. . . directly or indirectly caused by, arising from, or traceable
to. . .war. . . .”. The court found that the death of the officer was traceable to war and
was excluded by the policy. Scrutton, J, put it elegantly
29 :
. . . the words which I find it impossible to escape from are “directly or indirectly.” There
does not appear to be any authority in which those words have been considered, and I find it
impossible to reconcile them with the maxim causa proxima non remota spectatur. If it were
contended that the result of the words is that the proximate cause, whether direct or indirect,
is to be looked at, I should reply that that result does not appear to me to be consistent or
intelligible. I am unable to understand what is an indirect proximate cause, and in my
judgment the only possible effect which can be given to those words is that the maxim
causa proxima non remota spectatur is excluded and that a more remote link in the chain of
causation is contemplated than the proximate and immediate cause.
Scrutton, J, was convinced that if the officer had been struck by lightning while he
happened to be at a military camp, it could not be said that his death was indirectly
caused by the war. However, in this case he had been killed by the train while
undertaking military duties, and thus his death was indeed indirectly caused by the
war. The main message that emerges from the judgment is that the use of the words
“indirectly caused by” still requires a genuine causal connection between the loss
and event, albeit not an immediate one. It is sufficient that the two are connected by a
“chain of causation”, however many links apart they may be in that chain.
30 In the
context of CL380, this means that any causal connection in the chain between the
loss and use or operation of any computer, computer system, computer software
programme, malicious code, computer virus or process or any other electronic
system for the purpose of inflicting harm would be adequate to trigger the exclusion.
This would mean that if a surveillance camera in the car park of a warehouse is
disabled by a software to ensure a quick and safe escape and a cargo is stolen from a
safety deposit box vault by thieves manually disabling other security and drilling a
large hole, the loss will be excluded if CL380 is incorporated into the policy.
28 [1916] 2 KB 629.
29 Ibid. at 634.
30 This has been confirmed in Spinney’s (1948) Ltd v. Royal Insurance Co Ltd [1980] 1 Lloyd’s Rep
406 and more recently in Arc Capital Partners Ltd v. Brit Syndicates Ltd [2016] EWHC 141; [2016]
Lloyd's Rep IR 253.
Cyber Risks Insurance in the Maritime Sector: Growing Pains and Legal Problems
637
widest causation trigger that can be employed in the context of an exclusion clause.
In Coxe v. Employers’ Liability Assurance Corp Ltd
28 at the beginning of the First
World War, an army officer was killed by a train whilst inspecting his troops who
were guarding the old South East railway near Folkestone. When he was struck by
the train at night he was walking the line at a place where the general public were
prohibited in circumstances where the lights from a nearby signal box had been
dimmed in accordance with the Defence of the Realm Act 1914. The officer had
taken out a life insurance policy which contained an exception “The policy does not
insure against death. . . directly or indirectly caused by, arising from, or traceable
to. . .war. . . .”. The court found that the death of the officer was traceable to war and
was excluded by the policy. Scrutton, J, put it elegantly
29 :
. . . the words which I find it impossible to escape from are “directly or indirectly.” There
does not appear to be any authority in which those words have been considered, and I find it
impossible to reconcile them with the maxim causa proxima non remota spectatur. If it were
contended that the result of the words is that the proximate cause, whether direct or indirect,
is to be looked at, I should reply that that result does not appear to me to be consistent or
intelligible. I am unable to understand what is an indirect proximate cause, and in my
judgment the only possible effect which can be given to those words is that the maxim
causa proxima non remota spectatur is excluded and that a more remote link in the chain of
causation is contemplated than the proximate and immediate cause.
Scrutton, J, was convinced that if the officer had been struck by lightning while he
happened to be at a military camp, it could not be said that his death was indirectly
caused by the war. However, in this case he had been killed by the train while
undertaking military duties, and thus his death was indeed indirectly caused by the
war. The main message that emerges from the judgment is that the use of the words
“indirectly caused by” still requires a genuine causal connection between the loss
and event, albeit not an immediate one. It is sufficient that the two are connected by a
“chain of causation”, however many links apart they may be in that chain.
30 In the
context of CL380, this means that any causal connection in the chain between the
loss and use or operation of any computer, computer system, computer software
programme, malicious code, computer virus or process or any other electronic
system for the purpose of inflicting harm would be adequate to trigger the exclusion.
This would mean that if a surveillance camera in the car park of a warehouse is
disabled by a software to ensure a quick and safe escape and a cargo is stolen from a
safety deposit box vault by thieves manually disabling other security and drilling a
large hole, the loss will be excluded if CL380 is incorporated into the policy.
28 [1916] 2 KB 629.
29 Ibid. at 634.
30 This has been confirmed in Spinney’s (1948) Ltd v. Royal Insurance Co Ltd [1980] 1 Lloyd’s Rep
406 and more recently in Arc Capital Partners Ltd v. Brit Syndicates Ltd [2016] EWHC 141; [2016]
Lloyd's Rep IR 253.
Cyber Risks Insurance in the Maritime Sector: Growing Pains and Legal Problems
637