Recently the media have been full of stories about climate litigation. In the last few weeks alone, we have seen reports of a claim brought in Guyana by an indigenous tourist guide and a university lecturer claiming that (to quote the Guardian report):

Guyana’s approval of oil exploration licences violates the government’s legal duty to protect their right and the right of future generations to a healthy environment. It is the first constitutional climate case in the Caribbean to challenge fossil fuel production on climate and human rights grounds.”

Also a class action in Australia, brought by eight High School students, where the Court found that the Australian federal environment minister has a duty to take reasonable care not to cause young people injury from the harms of climate change (at least, that’s how the Guardian reported it).

And of course a Dutch court recently ordered Shell to cut carbon emissions from its oil and gas by 45% by 2030.

More recently still, we have learned that climate activists have sued the Italian government over “inaction”. The 203 claimants apparently include environmental associations, Italian citizens (well, one would hope so), foreign residents, and young activists with the Italy wing of the Fridays for Future group.

These are just some of the more recent cases to come to trial and/or to be given prominence by that large section of the mainstream media which approves of this sort of thing. This is just the tip of the iceberg. So I thought I’d look into the issue a little further. But – where to start?

Thank goodness for the Sabin Center for Climate Change Law, Columbia University, the Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science (and you won’t hear me say that very often). The reason for my gratitude is that they have been monitoring the situation closely, and thanks to them, much of the information regarding climate litigation trends is readily available.

Fresh Fields

Strictly speaking, I’m referring to the major law firm of Freshfields Bruckhaus Derringer, whose website contains an excellent interactive section, which can be scrolled through to see the trends. It is based on the information provided by the monitoring groups mentioned above (accurate to December 2019). From this we learn:

There had, to that date, been almost 1,400 climate-related litigation cases around the world;

The number rose dramatically over the 15 years to 2019;

Most are brought in the west, with a handful in emerging markets;

Almost 1,100 (or 79%) of those cases were brought in the USA…

…where the four years to 2019 saw the largest number of cases opened since records began;

Globally, 135 cases (10%) were directed at businesses, mostly in the USA and Australia;

Such litigation (against businesses) had increased since 2016;

Most (79) of the 135 cases against businesses involved defendants from the energy and natural resources industry, and most of those were in the USA;

More cases were, by 2019, starting to emerge in Africa, Latin America and Asia.

The interactive nature of the website makes it a fascinating tool. Click on a dot (representing a case) and it offers a brief summary of that particular piece of litigation. The first one I clicked on at random was a piece of Polish litigation alleging that Polska Grupa Energetyczna, the operator of Europe’s largest power plant, Belchatow, has not presented any official plan to reduce its climate impacts. The lawsuit seeks to block the plant operators from burning lignite – or require measures to reduce carbon dioxide emissions – by 2035.

Right next to it, the adjacent dot happened to be the Dutch case against Shell. Next again, a case in Luxembourg against the Luxembourgish Minister of Social Security, who, Greenpeace claims, failed to respond to a letter asking for information regarding how Luxembourg’s sovereign pension fund planned to align its investments with the objectives of the Paris Agreement, and information on the climate-related financial risks associated with the fund’s investments.

And so on – endlessly fascinating if you’re into that sort of thing.

Shareholder action

A new development has been that of activists buying shares in fossil fuel companies, mostly it seems with the idea of becoming active at shareholder meetings, and persuading management to change direction, and/or to impose activist directors on the board. There is another possibility, though, arising from this activity – the possibility of shareholder litigation against the company itself.

And as the Freshfields website points out, this is where the Law of Unintended Consequences might have a role to play. Fossil fuel companies that prioritise investments in emissions-reducing technologies over immediate profits run the risk of shareholder suits from short-term investors. They are in the potentially impossible position of facing the twin risk of being sued, including via class action litigation, whatever they do. They are, potentially, damned if they do and damned if they don’t.

Freshfields again:

Plaintiffs bringing common law tort and public nuisance claims are now seeking to rely on academic studies that attempt to quantify individual actors’ contribution to man-made emissions since the start of the industrial era. Researchers are developing models in a bid to tie climate change to extreme weather at a local level – and to predict where those events might strike next. The Federal Judge hearing a case in San Francisco was so intrigued by developments in causation and attribution science that he staged a day-long ‘teach-in’ to prepare for legal arguments. While he ultimately ruled his Court was not the right forum for such a case (and stated in his judgment that the current slew of nuisance suits could harm attempts to reach international consensus on climate change), it brought these developing theses into the spotlight.”

In the USA, for now at least, however, the Supreme Court decision of AEP v Connecticut, the first global warming case based on a public nuisance claim, which was brought to court in the Southern District of New York in 2004, offers some protection to fossil fuel companies from litigation. The unanimous ruling of the Court states that the management of emissions is the responsibility of the Environmental Protection Agency, not corporations. As we are seeing increasingly, however, this same principle does not necessarily seem to apply in other jurisdictions.

Europe

There are many excellent websites which can be used to find out more about the world of climate litigation. One organisation (Germanwatch) which I believe is funding the case in question, has a timeline for a potentially very interesting (and, for fossil fuel companies, worrying) case: Lliuya -v- RWE.

In November 2015, Mr Lliuya, a Peruvian farmer and mountain guide brought a case in the German Courts against the German company, RWE. His claim is that the energy company’s greenhouse gas emissions threaten his family, his property, and a large part of the city of Huaraz. RWE’s defence disputed its liability for alleged climate-change damage in the Andes, and further denied that Huaraz is at risk from flooding. The Essen District Court dismissed the case, but the Appeal Court has allowed it to go forward. Experts have been appointed, but further developments appear to have been delayed by the covid crisis.

Should liability in this case ultimately be found against RWE, the precedent could be very damaging indeed for fossil fuel companies. This is an area where Europe seems to be much more hostile to fossil fuel companies than has been the case in the USA to date (despite the significantly greater number of cases so far brought in the USA). Whether the US situation changes should the balance on the Supreme Court change during the Biden presidency remains to be seen.

There are just too many cases to mention in detail here, but for anyone interested, in addition to the Freshfields website, much useful information can be found here:

https://www.climateinthecourts.com/cases-against-corporations.html

2020 Update

As mentioned above, Freshfields’ excellent interactive website takes matters only up to the end of 2019. Fortunately, the LSE and Grantham Institute have produced a snapshot of global trends in climate litigation, by way of an update, to July 2020 (unfortunately there has been almost a year of considerable activity since then):

This is a 30 page report, and it’s well worth reading. The trends identified above continue. The countries (or jurisdictions) where litigation has taken place between 1986 and 2020 are worth noting, by case number (the main ones only):

USA – 1,213;

Australia – 98;

UK – 62;

EU – 57;

Canada – 22;

New Zealand – 18;

Spain – 13;

France – 11;

UN Framework Convention on Climate Change – 10;

Brazil, Germany, OECD – 6 each.

Some interesting general observations emerge.

More than 80% of cases outside the USA have been brought against governments.

Climate change is at the centre of legal arguments in about 41% of cases, and peripheral in about 59%.

Outside of the USA, 58% of cases had outcomes “favourable to climate change action”.

Developing trends include using human rights arguments as support in increasing numbers of cases; and fossil fuel companies are being subjected to increasing numbers of different types of litigation, especially in the USA, ranging from nuisance, to fraud, to disclosure-related claims.

2019 saw an escalation in claims; there were doubts as to what effect the covid crisis might have on case numbers, but it does seem that case numbers are recovering nicely.

Going against the flow

But it’s not all one-way traffic (even if the vehicles going the other way are very much going against the flow):

Two German companies – RWE (fighting back, it seems – their lawyers must be busy!) and Uniper (although I believe the latter is majority Finnish-owned) – are suing the Dutch government for compensation over the country’s planned coal phase-out under a 1990s the Energy Charter Treaty (ECT). RWE is seeking 1.4 billion euros in compensation, and Uniper is claiming between 850 million and one billion euros, in each case because the Dutch Government is phasing out coal use by 2030, thus (so the claim goes) causing the demise of their coal-fired plants in the Netherlands.

As I understand it, the ECT contains provisions against appropriation of foreign-owned assets by Governments. The argument against the Dutch government is that the change in Dutch policy with regard to coal use greatly damages the value of the plants, and amounts to expropriation.

I suppose what is good for the goose is good for the gander, but this sort of claim is very much the exception to the rule. Search for it online, and the level of hostile commentary is significant.

The great unanswered question

Try as I might, I have been able to find no answer (other than in the Lliuya case) to the obvious question – who is funding all this climate change litigation? Articles on the websites of the BBC, Guardian and others, reporting on the litigation, never seem to go near that question. I doubt that the Australian High School kids are paying for their action against the federal government, so who is? Whoever it is, substantial amounts of money must be being spent in this rapidly-developing and rapidly-intensifying area.

via Climate Scepticism

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June 8, 2021