A Summary of Proximate cause in Business Law

In business law, a proximate cause is something which is deemed to be the legal cause of an injury. Along with cause-in-fact or “actual cause,” it is one of the key tools which a court will use to determine whether the defendant is responsible for an injury suffered by the plaintiff. Proximate cause issues can be a complex and uncertain area within business law. This is because disputes will often involve parties who agree that a particular action by the plaintiff led to an injury by the defendant, but disagree about who should be held legally responsible.

The fundamental principle behind proximate cause, says the Rottenstein Law Group, is that “in order to win a personal injury case, the injured person must show that an injury was caused by the defendant’s negligence.” First, the court must determine whether one or more actions by the defendant actually led to the injury at all – an assessment known as the “cause-in-fact” or the actual cause. Next, once it has been determined that the defendant’s actions led to the injury, the court will determine whether he or she is legally liable. It is this second judgement which determines the “proximate clause.”

The specific way in which a court will determine proximate cause in business law varies between different jurisdictions, because legislation and case law may specify slightly different tests which must be applied. In general, however, the Cornell University Legal Information Institute says that a proximate cause is any actual cause which involves some form of legal liability.

In business law, is possible for there to be a cause-in-fact which is not a proximate cause. For instance, it might be the case that there was no way the plaintiff could have reasonably foreseen this type or manner of harm arising as a result of their actions. This is not necessarily limited to the amount of harm one would reasonably expect to occur in a given situation. Under the so-called eggshell skull rule or thin skull rule, plaintiffs (including businesses) may be held liable for all of the harm caused by their actions even if the injuries suffered are much more serious than would normally be expected.

Proximate cause issues are important for businesses because they will be critical elements in determining whether is a business is at fault in the event that customers, bystanders, or employees are injured or even killed as a result of the business’s activities. The longer and more indirect the chain of events between a business’s actions and the resulting harm, the less likely it may be that a court will recognize the business’s actions as a proximate cause.

In the United States, one of the most important rulings related to proximate cause in business law is Palsgraf v. Long Island Railroad (1928), in which the New York Court of Appeals ruled that the railroad company was not legally liable for the injuries which resulted from a complex incident on a railway platform because they could not have reasonably foreseen that the defendant would be harmed by their actions. In contrast, if, for instance, a commercial vehicle crashes into a house due to negligence on the part of the operator, injuries to anyone within the house would be a reasonably foreseeable consequence. As a result, it is more likely that a court would find that the crash was a proximate cause of the injuries.