Two climate change related cases made global headlines in recent weeks: a Dutch case, brought by a group of activists, against Royal Dutch Shell that imposed carbon emission limits on the oil producing multinational and an Australian case that found the Minister for the Environment had a duty to protect young people from the effects of climate change. In this article, we look at these decisions in their wider legal context, and consider how the law may continue to develop in this area, including in the UK.
Beyond the headlines: Recent trends in global climate change litigation
Climate change litigation has been brought on the basis of both public and private law duties. Public law claims (which often relate to infrastructure projects or the application of statutory environmental regimes) have, to date, been more successful than the claims based on private law duties. These private law claims have foundered in their attempts to establish a link between the global effects of climate change and damage alleged to have been suffered by individual claimants, in claims brought against specific defendants.
That said, there have been a variety of attempts to bring private law claims in different jurisdictions over recent years. The Milieudefensie decision is one such very recent example, and it reflected a novel approach to the interpretation of relevant standards of care in a climate change case by reference to soft law human rights frameworks. The decision can also be viewed as part of a trend of ambitious attempts in a range of jurisdictions to use litigation to broaden the scope of global corporate accountability, this time in the sphere of climate change.
This class action, spearheaded by several environmental NGOs, was brought against Royal Dutch Shell ("RDS"), the head of a multinational group of companies headquartered in the Netherlands and the UK (the "Shell Group"). In essence, the claimants argued that RDS owed a duty to Dutch citizens to protect them from the adverse effects of climate change. The duty in question was based on a provision of the Dutch Civil Code, somewhat analogous to an English negligence or tort claim, that provides for a private law action should a defendant breach an "unwritten standard of care" owed by it to a claimant. The claimants alleged that RDS breached the unwritten standard of care it owed to them by failing, in implementing globally applicable Shell Group corporate policies, to commit sufficiently to reducing its level of emissions to an appropriate level by 2030.
The claimants alleged that the unwritten standard of care should be defined by reference to international human rights instruments, such as the UNGPs, the UN Global Compact, and the OECD Guidelines for Multinational Enterprises, as well as environmental instruments such as the Paris Agreement. This "soft law", in itself, did not give rise to a domestic cause of action against RDS. However, the claimants argued that this international soft law informed the unwritten standard of care that RDS owed to them. The claimants pointed to certain statements on the RDS website, as well as strategy statements from the European Commission to support its argument that RDS had committed itself to following these instruments, although the court concluded that this was "irrelevant" as the content of the instruments themselves were "universally endorsed" anyway.
Ultimately the Dutch District Court agreed with the claimants and held that RDS had breached the unwritten standard of care it owed by failing to implement appropriate corporate policies. It considered the existing policies to be "intangible, undefined and non-binding". The Court also considered the policies, which focused on carbon reduction by 2050, to be insufficient: RDS needed to implement policies that would strive for a reduction by 2030 across the entire Shell Group. The decision has been appealed by RDS.
The wider context
This case has not been brought in a vacuum. Within the Netherlands, it follows the recent and high profile Urgenda Foundation claim where an NGO successfully sought to impose additional carbon emission targets on the Dutch Government such that it would need to bolster its existing commitments to reduce the State's carbon emissions from a 20% decrease on 1990 levels to a 25% decrease. The Supreme Court found in favour of the claimants and considered the Dutch Government's 20% target to be unjustified in circumstances where scientific consensus deemed a 25% decrease to be the minimum target in order to keep below a 2 degree Celsius global warming target. Urgenda Foundation was, however, brought against the State and not a private company. Similar cases have been brought in the US, again against public bodies, to try to force them to adhere to climate change mitigation norms and standards1. The Milieudefensie case takes a significant further step, in that it has resulted in the imposition of similar targets on a private company by means of a private law action. The application of human rights standards in the context of climate change related litigation is, given the international nature of the soft law human rights frameworks concerned, not necessarily limited to Dutch jurisprudence. Given the global focus on climate change issues, socially, politically and by policy makers, it is not surprising that courtrooms are also becoming battlegrounds for this debate. The potential for similar novel arguments to be raised in other jurisdictions is obvious. By their nature, such claims would be ambitious and breaking new ground, but it appears that there is a growing appetite across jurisdictions for such claims to be brought, and funding available to do so. Whether existing legal frameworks can or should be adapted in favour of claimants bringing these types of claim is another question, but from the perspective of those bringing these claims, the litigation itself does not necessarily need to succeed in order to raise awareness of the impact of climate change and to effect change in corporate behaviours.
One interesting case, similar to the Milieudefensie decision, is the New Zealand case of Smith v Fonterra. There, a Court refused to strike out a claim brought (amongst other legal bases for the claim) on a novel climate change-related cause of action. The case, brought by an individual against significant greenhouse gas emitters, pleaded that the defendants were either (i) negligent, (ii) committed a form of public nuisance or (iii) breached an inchoate "climate change" duty of care. The defendants sought to strike out each of these claims. While Court agreed that the first two causes of action were untenable (and therefore should be struck out), it declined to strike out the novel claim based on the inchoate duty of care. This was because the Court found that the claim should to be addressed by means of a full trial, rather than being dealt with in a preliminary context, and the Court reached this conclusion because of the novel nature of the claim. In coming to this decision, the Court was heavily influenced by an extra judicial paper, written in 2018 by three of New Zealand's Supreme Court justices, including the Chief Justice, which suggested that while the threat posed by climate change could not easily be met through existing causes of action (such as negligence), a new private law cause of action may develop in order to meet the challenges associated with climate change mitigation. In the circumstances the Court considered that this could only be properly explored at trial and, accordingly, it would be inappropriate to strike the claim out.
Application to the UK
In the UK, a claim like the one brought in Milieudefensie or Fonterra would require an English Court to push the boundaries of established legal principles to their limits, if not expand them. Novel claims like these would certainly require a policy-driven change to established causation principles. Courts have, of course, done this before (for example in relation to asbestos-disease claims2). Nevertheless, balanced against a policy-driven desire to provide redress in a particular context and/or to a particular group of claimants, such development of the law can have unintended consequences, in that it may invite future attempts to continue to extend existing legal principles. These are all issues which Courts globally, including in the UK, may need to grapple with in the context of a perceptible and growing desire in some quarters to use litigation as a means of furthering action on climate change.
The UK Supreme Court and the English Court of Appeal have indicated in recent decisions that they are willing to entertain the expansion of common law duties in negligence in the context of parent company and value chain claims, albeit those principles are yet to be tested in a relevant case by means of trial (for more on this, see our overview in the Disputes Resolution Yearbook 2021). A similar willingness to develop the common law in the context of climate change litigation cannot be ruled out.
Given the headline grabbing nature of Milieudefensie it would not be surprising if a similar claim is brought in the UK in due course – even in circumstances where the claimants know that their claims face very substantial litigation risk. Irrespective of whether such claims ultimately succeed, it, there are obvious potential reputational and commercial implications arising from them.
1 Columbia Law School's Sabin Center for Climate Change Law has a helpful breakdown of US climate change cases, which can be accessed here.
2 Fairchild v Glenhaven Funeral Services Ltd  1 AC 32 (HL). In Fairchild, workers had been exposed to asbestos in the course of working for multiple employers such that it was not practicable to determine which employer was responsible to each employee's asbestos exposure. The Court's solution was to allow a claimant to prove that a defendant employer had contributed to the risk of exposure, rather than having caused the risk on a traditional "but for" analysis. Interestingly the court in Smith v Fonterra, after surveying the UK's asbestos line of caselaw, concluded that applying such a principle to climate change litigation would create "indeterminate liability" for defendants.
We can expect to see the number of legal challenges relating to climate change continuing to rise. This is an area of the law which is rapidly evolving and where, by definition, the limits of existing legal concepts and frameworks will be tested to deal with what is said to be an emerging and global risk. The intersection between human rights and climate change, and the emphasis on intergenerational impact and vulnerable groups, may be important in the development of private law litigation in this area over the coming years, across a range of jurisdictions. Moreover, as the cases considered here demonstrate, there is a global appetite to use litigation to promote action against climate change and to shape state and private bodies' responses in this area. This is likely to test both legal and procedural boundaries in many countries, as well as encouraging different types of claim – including attempts to create new hybrid public/private actions (for example, the approach seen in Sharma where concepts commonly found in the tort of negligence were used to attempt to challenge the public law powers of a Government Minister).
It is clear that, given global risk presented by climate change, the litigation trends which relate to it will be similarly international in scope. For example, in the Milieudefensie case a Dutch Court has made an order concerning the global policies of a Dutch corporation that has global effects due to the multi-jurisdictional operatations of the Shell Group. Similarly activists (Friends of the Earth) opposing the development of a liquefied natural gas field in Mozambique are choosing to challenge it through ongoing judicial review proceedings in the UK. The challenge has been brought on the basis that a UK export finance decision (that gave £900m in loans to a gas pipeline project) was a violation of both the UK's climate commitments (including under the Paris Agreement), and also Mozambique's climate commitments, due to the potential impact on greenhouse gas emissions in Mozambique.
Standing back, it is clear that this is a fast-paced and rapidly evolving area of the law, which has particular implications not only for those businesses whose operations give rise to greenhouse gas emissions, but also for those who invest, lend and do business with them. This is also an important lens through which to consider developing trends for global corporate accountability, particularly in relation to ESG, and the way in which soft law frameworks, particularly those concerning business and human rights, are relevant in this area.