J. J. LLOYD INSTRUMENTS LTD. v. NORTHERN STAR INSURANCE CO. LTD. (THE “MISS JAY JAY”)

Under a marine time policy, an adverse sea may constitute external accidental means although it was foreseeable and not exceptional. The question is whether the event was fortuitous, not whether it was incapable of anticipation.

Proximate cause means proximity in efficiency, assessed by a broad commonsense view. A loss may have more than one concurrent effective cause. Where one proximate cause is insured and another is neither insured nor expressly excluded, the assured may recover. The result differs where an effective concurrent cause falls within an express exclusion.

The plaintiffs' motor cruiser suffered substantial hull damage while crossing from Deauville to Hamble in choppy and confused sea conditions. The vessel was defectively designed and unseaworthy for that passage, but a properly designed vessel would not have sustained the damage in the conditions encountered.

The policy covered loss or damage directly caused by external accidental means. Mustill J gave judgment for the plaintiffs: (1985) 1 Lloyd's List Reports 264. The insurers appealed, contending that the sea was not an accidental external cause and that the design defects were the dominant cause. The central issue was whether the sea conditions were a proximate insured cause despite the concurrent unseaworthiness.

1. The appeal was dismissed with costs. Lawton and Slade LJJ each concluded that the plaintiffs established a covered loss; Croom-Johnson LJ agreed with both judgments.
2. Lawton LJ held that the repeated impacts of the adverse sea on the hull were external and accidental. They were unintended and unexpected from the assured's standpoint. The fact that such sea conditions could be anticipated did not deprive the event of its accidental character. Slade LJ agreed that accidental means excludes events which must happen in the ordinary course of navigation, but includes an unwanted event which may occur even if it is foreseeable.
3. The policy's requirement that damage be directly caused carried the same meaning as the requirement of proximate causation under Marine Insurance Act 1906, section 55(1). Proximity is a matter of efficiency, not temporal sequence, and is assessed by a broad commonsense view of the whole position.
4. The adverse sea and the faulty design and construction were concurrent causes of equal, or nearly equal, efficiency. Neither alone would have caused this loss. Both were therefore proximate causes. The insured cause remained a proximate cause even though unseaworthiness was also effective.
5. The policy contained neither a relevant seaworthiness warranty nor an exclusion for loss to which faulty design merely contributed. Its design exclusion applied only where loss or expenditure was incurred solely in remedying, or resulted from, faulty design. Since no concurrent cause was expressly excluded, the assured could recover. The court contrasted this with the position where an effective concurrent cause is expressly excluded.
6. Slade LJ added that the vessel was not in a state of general debility. The authorities treating debility, rather than the ordinary action of wind and waves, as the sole proximate cause were therefore distinguishable.

• Court of Appeal (Civil Division): the insurers' appeal was dismissed with costs.
• High Court of Justice, Queen's Bench Division, Commercial Court (Mustill J): judgment was entered for the plaintiffs, reported at (1985) 1 Lloyd's List Reports 264.