Causation and Remoteness

Introduction

Causation and remoteness are two distinct but closely related **control devices** that sit between a proven breach and a quantified award of damages. **Causation** asks whether the defendant's breach is a sufficient cause of the claimant's loss; **remoteness** asks whether the loss, even if caused, is of a **kind** for which the defendant should be held responsible. This chapter examines the **two-stage causation inquiry** (factual 'but for' causation and legal causation, including intervening acts), the **rule in Hadley v Baxendale** and its two limbs, and the leading refinements in **Victoria Laundry**, **The Heron II** and **The Achilleas**.

Assessment focus

The SRA SQE1 FLK1 specification lists **'causation and remoteness'** as a standalone Contract Law topic, reflecting its centrality to damages analysis. For SQE1 you must know (i) the **two-stage causation inquiry** — factual 'but for' causation and legal causation, including **novus actus interveniens**; (ii) the rule in **Hadley v Baxendale** (1854) and its **two limbs**; (iii) the refinements in **Victoria Laundry** [1949], **The Heron II** [1969] (contract-standard compared with tort-standard) and **The Achilleas** [2008] (assumption of responsibility); and (iv) how remoteness interacts with the **measure of damages** (Chapter 11) and with the **duty to mitigate**. Expect single-best-answer questions testing whether a particular head of loss was **'in the reasonable contemplation'** of the parties at the date of contracting, whether **special knowledge** has been communicated under the second limb, and whether an intervening event **broke the chain of causation**.

Study tips

1) Treat causation and remoteness as a **two-step filter**: first establish causation (factual + legal), then test remoteness. 2) Remember the **but for** test plus the **loss-of-a-chance** exception where loss turns on a third party's contingent conduct (Chaplin v Hicks; Allied Maples). 3) Legal causation requires the breach to be the **effective or dominant cause** (Galoo); a deliberate, informed, voluntary act of the claimant usually breaks the chain (Lambert v Lewis). 4) Master the **two limbs of Hadley**: first limb = losses arising naturally (imputed knowledge); second limb = unusual losses recoverable only if **special facts were communicated** (actual knowledge). 5) Apply the **Heron II threshold** — 'not unlikely', 'liable to result', 'a serious possibility' — which is **higher than tort's reasonable foreseeability**. 6) Use **The Achilleas** only where market practice clearly shows the defendant did **not assume responsibility** for the loss. 7) **Crucially**: remoteness is judged at the **date of contracting, not the date of breach**.