New report launch: Climate change - Liability risks

Clyde & Co LLP

By Nigel Brook and Neil Beresford

In our latest climate change report, 'A rising tide of litigation,' we explore some of the liability risks that organisations have faced and continue to face as plaintiffs attempt to use the courts to further their cause or sue for damages. This article looks at plaintiffs' strategies and what action has taken place in the courts to date. 

So far over 1200 climate change cases have been filed in more than 30 jurisdictions, including the US, Australia, the UK, the EU, New Zealand, Brazil, Spain. Canada, and India. Most climate change litigation has taken place in the US, with over 950 cases filed there so far.

The litigation which has been emerging over the last two decades can be classified into three broad categories, the first two of which will be explored in this article:

1. Administrative cases against governments and public bodies
2. Tortious claims against corporations perceived as perpetrators of climate change
3. Claims brought by investors against corporations for failing to account for possible risks to carbon-intensive assets or for failing to account for or disclose risks to business models and value chains in financial reporting.

Administrative cases

Administrative cases are those brought against governments or public bodies, with the aim of challenging decisions and influencing conduct. These cases focus on mitigation, particularly the reduction of GHG emissions, or on adaptation to climate change risks, for instance, the protection of coastal cities from rising tides.

The earliest examples of climate change litigation were administrative cases against public bodies in the 1980's, following this; climate-related cases were seldom brought until the mid-2000s. What started as a trickle of climate change litigation by activists grew into a steady stream.

Overall, courts have tended to support, rather than oppose, administrative climate change actions. Some recent high-profile cases in Europe and the US suggest there will be further jurisprudential developments in favour of climate change regulation. 

Tortious cases against corporations

More recently, lawsuits have targeted private actors – such as fossil fuel companies – claiming that their actions have produced significant GHG emissions and contributed to climate change.

The early 2000s saw the advent of ‘private’ climate change litigation against corporations, the allegation being that their carbon-emitting activities contributed to climate change. Subsequently, a “first wave” of tortious cases arose between 2005-2015, followed by a “second wave”. Although many lawsuits have been dismissed, the plaintiff bar will inevitably begin refining its approach and commentators predict that climate change actions against corporates may be successful in the future.

The tortious cases comprising the first wave of climate change litigation against corporations were mostly framed in the US as public nuisance claims. These cases did not achieve great success. A main hurdle on the procedural side was plaintiffs’ standing before the courts, which required plaintiffs to show that their injuries were “fairly traceable” to defendants’ misconduct. Some courts also suggested that climate harms were inherently un-resolvable. Others indicated that the questions posed by plaintiffs were fundamentally ‘political’, meaning that the courts were inappropriate forums for their resolution.

The so-called “second wave” of cases since 2015 has seen climate change litigation commenced against corporations with renewed zeal. This is attributed by some commentators to a changing “scientific, discursive and constitutional context.” In terms of science, the key factors are:

  1. the growth and consolidation of climate science produced by the IPCC, alongside better localised data on climatic changes;
  2. the increased possibility of quantifying the proportional contribution of the world’s largest GHG emitters to climate change – particularly due to the publication of the “Carbon Majors” report in 201362; and
  3. the developments in attribution science (further explored below) As part of this second wave, complaints have been brought by cities and municipalities in the US, including by New York, Boulder, Seattle, San Francisco and Baltimore. In July 2018, Rhode Island became the first US state to bring climate change litigation against corporate actor.

Through successive “waves” of cases, a body of legal precedents has formed which can be seen as the “foundations” on which novel approaches to climate litigation have started to take shape. Knowing which legal arguments have resonated with courts and which have not, claimants can bolster their cases and may expect greater degrees of success.

The report looks at some of these cases in more detail and explores the novel approaches and developing legal considerations as well as further information on the global trends in climate litigation and their implications for business.

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