In (1) Michael Nulty Deceased (2) Wing Bat Security Limited (3) National Insurance and Guarantee Corporation Limited (NIG) v Milton Keynes Borough Council (the Council)  EWCA Civ 15, professional indemnity insurer NIG unsuccessfully appealed against a decision which saw the actions of its insured, an electrical engineer, described as the most probable cause of a fire in Milton Keynes in 2005. The standard of proof in civil cases in England and Wales is the balance of probabilities.
At first instance, three possible causes for the fire were suggested. Mr Justice Edwards-Stuart found that none of the three suggested causes were inherently likely. However, having found on the factual evidence that two were “very much less likely“, he concluded that the third, a theory that the electrical engineer carelessly discarded a cigarette end inside the recycling centre, therefore in law became the most probable cause. He therefore considered that Milton Keynes Borough Council had discharged the burden of proving that the electrical engineer had caused the fire and gave judgment in its favour.
On appeal, Lord Justice Toulson said Edwards-Stuart J had erred because no rule of law existed which required him to conclude that a third theory was the most probable cause simply because the first and second were very much less likely. Quoting Lord Mance in an earlier case, Toulson LJ said there was an inherent risk that a systematic consideration of the possibilities could become a process of elimination “leading to no more than a conclusion regarding the least unlikely cause of loss“. He suggested that at the end of any such systematic analysis, the court must stand back and ask itself whether it was satisfied that the suggested explanation is more likely than not to be true.
Despite agreeing with NIG that Edwards-Stuart J had erred in law, on examining the factual evidence, the Lord Justices in the Court of Appeal agreed with Edwards-Stuart J’s conclusion that the actions of the electrical engineer had caused the fire. The court therefore affirmed the first instance decision in favour of the Council and dismissed the appeal.
Please click here for a link to the judgment.