Why Does it occur?

The diarrhoea is caused by bile salts produced by the liver that are either not being produced or recycled by the body properly. Bile salts are released from the liver when a meal is consumed, especially if fat has been eaten. These bile salts are essential for digesting food and fat soluble vitamins as food travels through the small bowel (ileum). When the bile salts reach the far end of the small bowel they are mostly (approximately 95%) absorbed back into the body and travel back in the blood stream to the liver where they are stored until they are needed for the next meal.

See diagram:

But with bile acid diarrhoea excess bile salts enter into the large bowel (colon) and in response to this the body stimulates water secretions into the large bowel which causes the watery, urgent and painful diarrhoea. This is due to there either being more bile produced than the small bowel can absorb (primary) or  because the small bowel has been damaged either by disease, surgery or radiotherapy (secondary).       

Untreated bile salt diarrhoea can increase the risk of gallstones and kidney stones forming.