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An update on climate change litigation – no signs of cooling

Katharina Theil considers progress on legal moves around the world to bring companies to account for their contribution to climate change.

Posted on 28 August 2020

The COVID-19 pandemic has profoundly changed many aspects of our daily lives. However, one issue that remains firmly on the agenda is the urgent need for action to mitigate the worst consequences of climate change.

As the UK emerges from lockdown, the UK Committee on Climate Change has urged the Government to tackle the climate emergency in its attempt to revive the economy and has called for ‘a green, resilient COVID-19 recovery’.

Due to many governments’ failures to take adequate action, individuals and communities have turned to the courts as one means of achieving change (‘climate litigation’). 

Revelations that fossil fuel producers have known about the impact of carbon emissions since the 1980s, and possibly earlier, and have engaged in misinformation and deception campaigns have meant that not only governments, but increasingly also corporations have been subject to these lawsuits.

In October 2017, my colleague Jonny Buckley examined a number of US climate change lawsuits against major fossil fuel producers (‘carbon majors’), and considered whether these could pave the way for litigation against corporates in the UK. He concluded that although theoretically possible, the likelihood of similar claims being brought in the UK remained remote. This was primarily due to the difficulty in attributing specific damage to the carbon emissions of a particular company.

Update: Climate change lawsuits two years on

More than two years later, there has been much development in the global field of climate litigation.
Recent cases that have attracted particular attention include claims against states, such as Urgenda Foundation v the Netherlands (‘Urgenda’), and Juliana v US.

In Urgenda, the Supreme Court of the Netherlands confirmed an earlier decision holding that the state had a duty to protect its citizens from ‘dangerous climate change’ in accordance with its obligations under the European Convention on Human Rights (‘ECHR’).

Even more recently, on 31 July 2020, in a case known as Climate Case Ireland, the Irish Supreme Court held that the Irish Government’s National Mitigation Plan was defective and ordered the Government to produce a more ambitious strategy. 

Juliana v US, a constitutional climate lawsuit brought on behalf of 21 young people in the US, however, was dismissed in January 2020. The court held ‘reluctantly’ that the relief sought (an order requiring the US government to devise and implement a remedial plan) was beyond the court’s constitutional power, as this would involve complex policy decisions. Nevertheless, the claimants have noted that the judges were divided over the decision and requested a rehearing by a new panel of judges.

In the Californian cases filed by San Francisco and Oakland in September 2017, in state courts against five carbon majors, legal arguments have largely focused on whether the claims should be allowed to proceed in state or federal courts. The cases, brought in public nuisance, allege that carbon majors are the ‘proximate cause’ of climate change and seek to reimburse taxpayers for associated adaptation costs such as sea walls to protect from rising sea levels. Similar cases are also ongoing. In May 2020, the US Court of Appeals confirmed that San Francisco’s and Oakland’s claims could proceed in state courts.  The carbon majors’ request for a rehearing was denied.  Consequently, following an earlier dismissal, this most recent ruling appears to pave the way for the substance of the claims to be heard.

Climate attribution science has continued to expose the relationship between anthropogenic emissions and climate change.

An update to a study first published in 2014 suggests that the 20 largest oil, natural gas and coal companies are responsible for 35 per cent of the global fossil fuel and cement emissions between 1965 and 2017. The causal link between a specific company’s carbon emissions and particular harm, however, is still one of the key issues for claimants to grapple with.

To date, climate litigation in the UK has largely targeted state entities, for example by challenging planning permissions or policies that pay insufficient regard to State commitments, such as the Paris Agreement.  A case in point is Friends of the Earth’s recent success in challenging the government’s decision to expand Heathrow, represented by Leigh Day’s environmental law team. 

Corporate accountability after all?

Despite these difficulties, some recent cases indicate that courts around the globe are gradually becoming more receptive to engaging with corporates’ responsibility for their contribution to climate change.

In Smith v Fonterra Co-Operative Group Limited [2020], for example, a court in New Zealand rejected Smith’s arguments that the defendant companies had been negligent in emitting greenhouse gases or that their emissions constituted a public nuisance. Nevertheless, the court held that the claim for a novel tortious duty to cease contributing to climate change should proceed to trial. The court commented that “it may be that a novel claim such as that filed by Mr Smith could result in the further evolution of the law of tort. (…) I am not prepared to strike out the third cause of action and foreclose on the possibility of the law of tort recognising a new duty which might assist Mr Smith.”

A Peruvian farmer’s claim against RWE, a German energy company, was allowed to proceed in the German courts on appeal in November 2017.

The farmer alleges that global warming has caused glacial retreat in the area near his village Huaraz, causing acute threat of flooding of his property.

The claimant is seeking payment of 0.47 per cent of the estimated cost of measures to protect the property from damage in case of flooding.

The amount claimed is proportionate to RWE’s contribution to global greenhouse gas emissions between 1965 and 2010 (see Particulars, §9).

Considering RWE’s submissions against the appeal, the court held that “[i]n this context, the alleged threat to the plaintiff’s property is attributable to the defendant’s actions, i.e., to the active operation of power plants by the subsidiaries controlled by the defendant.”

RWE denies liability, arguing that a single company cannot be held responsible for the consequences of climate change. The court and parties are currently awaiting permission from the Peruvian authorities for a site inspection in Huaraz.

The case of Milieudefensie et al. v. Royal Dutch Shell plc. filed in the Netherlands in 2019, which builds on the arguments advanced against the government in Urgenda as regards a duty of care to take positive action, is likely to give further insight into a court’s willingness to extend duties recognised for the state towards corporate actors in the area of climate change.

In addition to tort claims by affected individuals and communities or NGOs who represent them, shareholders have become more vocal in advancing climate-related causes, including in courts and non-judicial forums.

Over recent years, lawsuits have been brought against banks, pension and investment funds for failing to disclose information on climate-related risks or to incorporate these risks into their decision-making.

At the same time, some government institutions have relied explicitly on climate change related reasons when denying permission for mining or infrastructure projects. Other routes have included complaints about misleading advertising by fossil fuel companies in breach of consumer protection legislation, such as a complaint to the UK Contact Point against BP for alleged violation of the OECD Guidelines for Multinational Enterprises.

Climate litigation continues to be pursued actively in many countries and new and old avenues are being explored and developed. 

Recent successes have been achieved primarily in cases brought against governments, and significant barriers to litigating climate change against corporate actors in the UK remain.
US courts hearing the lawsuits against the carbon majors are yet to grapple with the issue of causation and attribution of liability. 

Some pending cases from around the globe suggest that courts may become more receptive to holding corporates to account for their contribution to climate change.

In addition, it appears that other avenues, such as shareholder actions, have a significant role to play.
It is hoped that both judicial and non-judicial routes being developed around the world will be useful in holding corporates to account for the actions they take and that recent climate litigation successes against governments are indicative of what the future may bring.