List- members may be interested in the very recent decision of Hamblen J

in Sylvia Shipping Co Ltd v Progress Bulk Carriers Ltd [2010] EWHC 542

(Comm). Under a timecharter, there was a breach by the owners by failing

to maintain the steelwork within the cargoholds. The result was that the

charterers could not load a cargo of wheat in time and had to cancel a

sub-charter entailing a loss of profit of $273, 706. The question was

whether that loss was too remote. It was held that it was not which

seems correct to me. The importance of the case is that it contains a

superb in-depth and, in my view, correct analysis of The Achilleas,

which the owners were relying on to argue that the loss was too remote.

So eg, Hamblen J says:

[40].

In my judgment, the decision in /The Achilleas /results in an amalgam of

the orthodox and the broader approach. The orthodox approach remains the

general test of remoteness applicable in the great majority of cases.

However, there may be “unusual” cases, such as /The Achilleas /itself,

in which the context, surrounding circumstances or general understanding

in the relevant market make it necessary specifically to consider

whether there has been an assumption of responsibility. This is most

likely to be in those relatively rare cases where the application of the

general test leads or may lead to an unquantifiable, unpredictable,

uncontrollable or disproportionate liability or where there is clear

evidence that such a liability would be contrary to market understanding

and expectations.

[48]. The orthodox approach therefore remains the “standard rule” and it

is only in relatively unusual cases, such as /The Achilleas /itself,

where a consideration of assumption of responsibility may be required.

[49]. In my judgment, it is important that it be made clear that there

is no new generally applicable legal test of remoteness in damages. It

appears that in a number of cases this is being argued and that

decisions are being challenged for failing to recognize or apply the

assumption of responsibility test. This results in confusion and

uncertainty.

[50]. In the vast majority of cases tribunals of fact can and should be

able to apply the well established remoteness test with which they are

familiar and which, in the vast majority of cases, works perfectly well.

Andrew Burrows

Professor Andrew Burrows, FBA, QC (Hon)