Remoteness of damage is an interesting principle. Once the damage is caused by a wrong, there have to be liabilities. The question is how much liability can be fixed, and what factor determines it. The principle of Remoteness of Damages is relevant to such cases. An event constituting a wrong can constitute of single consequence or may constitute of consequences i.e. series of acts/wrongs. The damage may be proximate or might be remote, or too remote.

The Problem Of Remoteness

The question of the defendant's liability comes after a tort is committed. A unlawful act's consequences may be limitless, or there may be consequences of consequences. A cyclist, for example, strikes a person who is carrying a bomb in his pocket. The device detonates when the pedestrian is knocked down. The explosion kills the pedestrian and four other people on the road, while twenty others are severely injured. Due to the same explosion, a neighbouring building is consumed in flames, injuring several women and children. Can the cyclist be held accountable for all of these consequences? He is liable only for those consequences which are not too remote from his conduct. No defendant can be made liable ad infinitum for all the consequences which follow his wrongful act.1

Remote And Proximate Damage

If the damage is too remote in that case the defendant is not liable, but on the other hand if the damage is and consequences of the act is connected and not too remote in nature so in that case we can say the defendant is liable. It is not necessary that the event which is immediately connected with the consequences is proximate and that further from it is too remote.2 Let's take a case example and try to understand in a very simple way;

Scott V. Shepherd.

On October 28, 1770, Shepherd (defendant) threw a lighted squib (i.e., a parcel containing gunpowder that was on fire) into a marketplace. The squib landed near a stand where Yates was selling gingerbread. Willis, afraid of injury and the damage it would cause to Yates's goods, picked up the squib and threw it across the marketplace. It landed near a stand owned by Ryal, who was also selling goods. Ryal picked up the squib and threw it again across the market. The squib struck Scott (plaintiff) in the face and exploded, putting out one of Scott's eyes. Scott brought suit against Shepherd for trespass and assault. The jury found in favor of Scott.3

This case has become known as the Famous Squib case. The court dismissed the appeal; the injury to the complainant was the direct and unlawful act of the defendant who originally threw and intended to throw the squib. The other people were not 'free agents' in this situation and threw on the squib for their own safety and this was justifiable. The throwing on was classed as a continuation of the defendant's action, which was intended. Whatever followed this was part of the defendant's original act.

There are two main tests to determine whether the damage is remote or not:

1. The test of reasonable foresight
2. The test of directness

Let's us discuss one by one;

The Test Of Reasonable Foresight

If the consequences of a wrongful act could be foreseen by a reasonable man, then they are not too remote. If on the other hand, a reasonable man could not have foreseen the consequences, then they are too remote. And, an individual shall be liable only for the consequences which are not too remote i.e. which could be foreseen. 4

The Test Of Directness

According to the test of directness, a person is liable for all the direct consequences of his wrongful act, whether he could foresee them or not; because consequences which directly follow a wrongful act are not too remote. The test of reasonable foresight was rejected and the test of directness was considered to be more appropriate by the court of appeal in Re Polemis and Furness, Withy & Co. Ltd.

In the case of Re Polemis and Furness, Withy & Co. Ltd. Employees of the defendant had been loading cargo into the underhold of a ship when they negligently dropped a large plank of wood. As it fell, the wood knocked against something else, which created a spark which served to ignite the surrounding petrol fumes, ultimately resulting in the substantial destruction of the ship. At first instance (arbitration), it was held that the reasonable unforeseeability of the outcome meant that the defendant was not liable for the cost of the ship.

Issues: Can a defendant be held liable for outcome of events entirely caused by their (or their agents') actions, but which could not have been foreseen by either the party in question or any other reasonable party.

Decision/outcome: The Court of Appeal adopted a strict liability approach to causation and assessing liability here and subsequently held that the defendant was liable for all of the consequences that had resulted from their negligent actions. The fact that the extent of these consequences was neither subjectively appreciated nor objectively foreseeable was deemed irrelevant to such a determination.

Notably, this authority would go on to be replaced in the case of Overseas Tankship (UK) Ltd v Morts Dock and Engineering Co Ltd (The Wagon Mound) (No. 1) [1961] AC 388, however it has never been officially overturned in English law and theoretically remains 'good case law', despite its lack of application.5

The first authority for the view advocating the directness test is the case of Smith v. London & South Western Railway Company, in this case the railway company was negligent in allowing a heap of trimming of hedge and grass near a railway line during dry weather. Spark from the railway engine set fire to the material. Due to the high wind, the fire was carried to the plaintiff's cottage which was burnt. The defendant were held liable even though they could not have foreseen the loss to the cottage. 6

The test of directness has been considered to be incorrect and was rejected by the judicial committee of the privy council in Overseas tankship (U.K.) Ltd. v. Morts Dock and Engg. Co. Ltd. (Wagon mound case), an appeal from the New South Wales and it was held that the test of reasonable foresight is the better test.

The Test Of Reasonable Foresight: The Wagon Mound Case

For a while, the test of foreseeability lost its popularity to test of directness but it was the case of Overseas Tankship (UK) Ltd. v. Morts Dock and Engg. Co. Ltd., also popularly known as the Wagon Mound Case that bought it back in the limelight for jurists. Facts– The Wagon Mound was moored at a wharf in Sydney Harbour. Due to the negligence, oil spilt into the water and was mixed with the flotsam and floated around to another wharf where a ship was being repaired by welding. Because of the oil the flotsam caught fire and ignited the wharf. The owner of the wharf claimed damage caused to him.

The Supreme Court held the appellants liable on the precedent of Re Polemis case, but when the matter reached the Privy Council the judgement of the SC was reversed and Re Polemis case declared an unfit for further rulings. It was held that appellants could not have reasonably foreseen the damage to the respondent's wharf. Therefore, forty years later the Privy Council rejected the test of directness that was upheld in the Re Polemis case.7

Conclusion
The doctrine of the remoteness of damage is used to decide the compensation to be given when after a breach or wrongdoing. The wrongdoing may have multiple consequences arising from it which are divided into two categories- proximate and remote. Only the consequences that fall in the proximate are the ones the defendant will be held liable for.

They're divided into these categories by the test of directness and test of foreseeability. Today the test of foreseeability is considered to be more relevant than the test of directness, as an individual should be held liable only for probable consequences of his wrongdoing.

References:

1. R. K. Bangia, Law of Torts 130 (Allahabad Law Agency, Faridabad, 26th edn., 2021)
2. Supra note 1, at 130
3. Scott v. Shepherd, available at: https://www.quimbee.com/cases/scott-v-shepherd (Last Visited on march 6, 2022)
4. The test of reasonable foresight, available at: https://www.legalserviceindia.com/legal/article-2310-remotenessof-damage-in-the-light-oftort.html#:~:text=The%20term%20remoteness%20of%20damages,by%20an%20award%20of%20damages. (Last Visited on march 7, 2022)
5. Re Polemis and Furness, Withy & Co. Ltd., available at: https://www.lawteacher.net/cases/re-polemis-andfurness-withy.php (Last Visited on march 7, 2022)
6. Supra note 1, at 132
7. The doctrain of remoteness of damage, available at: https://lexpeeps.in/the-doctrine-of-remoteness-of-damage/ (Last Visited on march 8, 2022)