The combination of hepatocellular damage and portosystemic shunting due to disturbed hepatic structure - both extrahepatic and intrahepatic - results in this syndrome.
The underlying mechanisms are as yet unknown, but it may be that the problem is related to the liver's failure to remove toxic metabolites from the portal blood. These toxic metabolites may include ammonia, amino acids, short chain fatty acids and amines. It may be true that increased levels of GABA synthesised by gut flora have a role to play, but much work remains to be done.
Reference
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