The University of Exeter has had its claim against insurance provider, Allianz Insurance PLC, dismissed by the Court of Appeal after it was found that damage to the university campus caused by the controlled detonation of a World War II bomb in 2021 was in effect ‘an act of War’, and therefore fell within the scope of a War Exclusion clause within official insurance documentation.
The ruling may come as a surprise to many, given that it’s been over 70 years since the end of the War. However, when making his judgment, Lord Justice Coulson commented that the approach to legal causation is “more nuanced” than simply a “gut-feeling” that the incident was not “occasioned by war”, and that this was a case subject to “specific rules and principles”.
But what are those rules and principles? And what can we learn from this very unusual case?
What happened?
Back in 2021, the unexploded German bomb was discovered on private land next to the University’s Streatham campus. The allotment had been due for development when the device was discovered, prompting the evacuation of hundreds of nearby homes and approximately 1,400 students.
Bomb disposal specialists duly attempted to enact a “Low Order Technique” (LOT) controlled explosion, but this failed, resulting in the full detonation of the bomb. The fall-out left a crater large enough to fit three double-decker buses, and caused “structural damage” to many properties within the 100m exclusion zone, including the nearby Halls of Residence.
Due to the requirement to temporarily rehouse the students living there, the University duly filed an insurance claim for both business disruption and the physical damage caused to the premises.
But Allianz outright rejected the University’s claim citing the War Exclusion clause, arguing that the loss and damage were “occasioned by war”.
The Original Case
In order to determine whether the damage was indeed “occasioned by war” the Court applied a ‘proximate cause’ test. This is where the Court seeks to establish if an event or action is so sufficiently related to an incident that it can be deemed to be the very reason for that incident.
Allianz argued that the initial dropping of the bomb (undoubtedly an act of war) was the proximate cause of the loss. It also claimed that even if the bomb was not the sole proximate cause, it was certainly one of a number of proximate causes (the other being the detonation in 2021). This would mean that under the concurrent causes rule, where one of the causes is excluded from cover but the other is not, the exclusion will still stand.
For their part, the University contended that the deliberate act of detonating the bomb was the only proximate cause of the loss (especially given that the controlled detonation did not go to plan), and that policy exclusions should not apply to historic wars.
Upon hearing both arguments, the Court concluded that:
“(the)common sense analysis is this: the loss was caused by an explosion. The explosion was triggered by the reasonable (and indeed obviously correct) decision to detonate the bomb. That decision was necessitated by the presence of the bomb. If there had been no bomb, there would have been no explosion. The bomb provided both the explosive payload and the absolute need for the detonation. In my view, the dropping of the bomb was the obvious proximate cause of the damage.”
This is because proximate cause does not necessarily mean the “immediate or last” cause”. Instead, it’s about establishing the “real” root cause, or the initial trigger event.
The judge also noted that the passage of time between the bomb being dropped, and its eventual explosion bore “no relevant or material impact on the danger posed by the bomb”.
Citing FCA v Arch as precedent, it was outlined that human intervention (so long as it is deemed necessary) is not generally considered a proximate cause of loss if an earlier cause made the loss inevitable. In this case, the disposal of the bomb, once discovered, was essential, not optional, but the damage would not have occurred at all if the bomb hadn’t been dropped in the first place.
The Appeal
The appeal centred around whether the bomb detonation in 2021 was indeed “occasioned by war” and thus, if it was, whether it rendered the university’s insurance provision invalid.
The key question that needed to be addressed was whether the bomb led directly to the university’s damage or if there was another event (eg, the purposeful detonation) that disrupted the chain of causation. However, there was sign no negligence as the detonation squad’s actions were normal and reasonable given the circumstances.
As such, the Court of Appeal held that the initial ruling would stand because the incident was in fact inevitable due to the combination of two concurrent proximate causes: the act of war in 1942 and the detonation in 2021. Under the rules of concurrent causes, this meant that the insurer was well within its right to enforce its War exclusion clause and would take precedence over any other insured risk.
The ruling restates the essential ideas of causation as well as the standard that an English court will use when presiding over such matters.
It is not unusual for there to be multiple proximate causes of loss or damage. However, when analysing the chain of causation, it is important not to just focus on what the most immediate or obvious cause might have been, but rather adopt a common-sense approach, assess the bigger picture, and start at the very beginning of the story.
