Legal Definitions - causation

Definition: Causation refers to the act of causing or producing an effect. In legal terms, it is the link between an action and its consequences.

For example, if a person is injured in a car accident, they must prove that the accident caused their injuries in order to receive compensation.

In securities law, negative causation is a defense that suggests that the plaintiff's damages were caused by factors other than the depreciation in value of the securities resulting from registration-statement defects. If negative causation is proved, the plaintiff's damages should be reduced.

Example: A person slips and falls on a wet floor in a grocery store. They suffer a broken arm and require medical treatment. In order to receive compensation from the grocery store, the person must prove that the wet floor caused them to slip and fall, which resulted in their broken arm.

Explanation: In this example, causation is the link between the wet floor and the person's broken arm. If the person cannot prove that the wet floor caused them to slip and fall, they may not be able to receive compensation for their injuries.