Beyond the headlines: Recent trends in global climate change litigation

Overview

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.

Milieudefensie v Royal Dutch Shell: a new climate change duty?

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.

The case

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.

Footnotes

Columbia Law School's Sabin Center for Climate Change Law has a helpful breakdown of US climate change cases, which can be accessed here.

Fairchild v Glenhaven Funeral Services Ltd [2003] 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.

Sharma v Minister for the Environment: infrastructure projects placed under further scrutiny

Another recent decision, Sharma v Minister for the Environment touches on similar issues, this time in the context of a major infrastructure project in Australia. The claimants in this case, all children, brought a claim against the Australian Minister for the Environment (the "Minister") relating to the Minister's approval of a coal mine development by a coal mine operator. There are two particularly striking aspects of the case:

    • The case can be thought of as a hybrid between the private law and public law climate change case law: while it is centred around the way in which a Minister exercised a statutory power, the cause of action was founded in negligence. By contrast, high-profile UK climate change actions, to date, have been founded on public law jurisprudence concerning the alleged "unreasonableness" of a decision-marker's decision, which is a high standard to meet under English law.

    • What is also interesting about this case is the way in which the claimants used their youth to underline the intergenerational effect of climate change and, therefore, their standing to bring the claim. This is a strategy that has been used successfully in the US (more on this below) and may well become a global trend in climate change litigation.

The case

Under the Australian Environment Protection and Biodiversity Conservation Act 1999 (the "Act"), the Minister has the authority to approve certain infrastructure projects, including those relating to the establishment of coal mines. A mining company had applied to extend its existing coalmining permit. Therefore, in accordance with the Act, the Minister had a discretion to approve such an extension. At the time the case was heard the Minister had not used this discretion, but it was anticipated by the claimants that the Minister would approve the extension. The claimants alleged that, in carrying out this discretionary power, the Minister had a duty to act with reasonable care so as to not cause harm to Australian children. The claimants argued that a coal mine would contribute to the effects of climate change, albeit with some delay. Because of this delay, the harm from the effects of climate change will occur when the claimants are adults and therefore they have a particular, foreseeable, vulnerability should a coal mine be constructed. The claimants sued the Minister, seeking a declaration from the Court that the Minister had a duty to consider the impact the decision would have on Australian children, and also seeking to injunct the Minister from carrying out their discretion until the Court had come to its decision.

On traditional principles, the common law has some conceptual difficulties when it comes to private law claims seeking redress for harms alleged to be connected to climate change. These tend to relate to (i) standing, (ii) causation and (iii) harm/loss. The claimants in Sharma constructed their claim to focus on the intergenerational inequities associated with climate change and, therefore, it carved the children out as a particular vulnerable class or group. The Court engaged closely with this argument, and it carefully considered the merits of the common law adapting to recognise a novel cause of action in the context of an intergenerational divergence of interests. Ultimately the Court considered that there was a special relationship between the Minister and the children, that the harm to the children was reasonably foreseeable, that the children were vulnerable, and that the Minister had the ability to avoid this harm through the operation of their statutory power. Accordingly the Court declared that the Minister did owe a duty of care to the children when exercising their statutory discretion. The Minister has appealed the decision.

The wider context

This case focussed on the intergenerational divide within Australia in relation to climate change and its impact. It may well be that future climate change litigation focusses on other vulnerable groups (for example, older claimants who are vulnerable to the effects of climate change today (as has occurred in Switzerland), or individuals living in a particular geographical area). In relation to the latter example, the claimants in the Milieudefensie case considered this point themselves: one group of claimants came from a part of the Netherlands which is particularly susceptible to flooding (i.e. risk to their property rights was particularly acute). Ultimately the Court in Milieudefensie was willing to allow the wider group of claimants to have standing and so there was no need to consider the particular vulnerability of this group of claimants. However it may be a feature of this type of litigation going forward. 

Similar approaches to this have been taken in the US and Canada. North American climate change litigation has been brought by public bodies, NGOs and other interest groups, and individuals. The defendants are usually either the government (both Federal and State governments) or companies associated with high carbon emissions such as oil companies. These claims have generally sought to either reduce current and future emissions by compelling public bodies to reduce or prohibit certain carbon emitting behaviours via regulation (and/or enforcement), or they seek compensation for existing harm caused by historic pollution. 

For example, in the well-known (and ongoing) Juliana v United States of America litigation, climate change campaigners (all of whom were children) sought similar declaratory and injunctive relief against a wide range of Federal government agencies and individuals. The claim sought to extend an existing fiduciary duty owed by the Federal government (to protect public property from harm) to a duty to protect citizens from harm caused by climate change. The claim has taken a long time to proceed (it has not reached trial and the most recent decision, by the Court of Appeals for the Ninth Circuit, dismissed the claim on the grounds that the plaintiffs lacked standing).

Most climate change litigation in the US to date has been unsuccessful, although it has of course drawn attention to climate change issues. The reason for the lack of success appears to be that Courts in the US have struggled to accept, on the basis of traditional causes of action, a causative link between, say, a defendant's greenhouse gas emissions and the harm alleged to have suffered by a claimant. Interestingly, the Courts in Milieudefensie and Sharma were more comfortable in accepting this causitive link. As climate change litigation matures we may start to see the development of legal and evidential strategies which address these obstacles, in particular in relation to causation, although whether they ultimately succeed will be a matter for different courts in a variety of jurisdictions to consider.

Application to the UK

Climate-focussed judicial review claims have been brought before English Courts in recent years, although they have not had the same level of success that these international claims have had. The UK judicial review claims have focused on challenging UK Government policy in light of commitments made to mitigating climate change measures, including the Paris Agreement. These cases have hit the headlines, notably including the opposition to the proposed third runway at Heathrow Airport and the High Speed Two ("HS2") railway. Both cases, while centred on public law issues, have had an impact on high profile infrastructure projects. 

  • In R (on the application of Friends of the Earth Ltd and others) v Heathrow Airport Ltd [2020] UKSC 52, a group of claimants sought to challenge the lawfulness of the Secretary of State for Transport's decision to allow an application for a third runway at Heathrow Airport to proceed. In essence, the Secretary had issued an Airports National Policy Statement ("ANPS") for infrastructure projects, which included Heathrow. The claimants argued that the Secretary of State had not taken the Paris Climate Change Agreement into account when it issued the ANPS, and had failed to apply the Climate Change Act 2008 (which enshrined Government policy on carbon targets and emissions into UK law) and therefore acted irrationally in making the decision. The Supreme Court, however, considered that the Secretary had acted appropriately and that the ANPS was lawful.

  • In a similar case, Packham v. Secretary of State for Transport [2020] EWCA Civ 1004, the Court of Appeal considered whether the HS2 railway project had suitably considered greenhouse gas emissions in the lead up to 2050, and in accordance with the Paris Agreement and the Climate Change Act 2008. It determined that the government had suitably considered relevant climate factors, and subsequently that there was no ground for appeal.

Although these cases have been unsuccessful, further challenges are still being made. The UK Government has introduced an even more stringent climate policy since these decisions, including the transition to Net Zero and cutting emissions by 2030. As a result, recent cases have been brought that seek to challenge Government decisions against this even higher standard, which may lead to a new wave of litigation either in respect of these projects or in respect of new infrastructure initiatives. Greater attention is also being given to the impact of emissions and pollution on public health, and their medical effects on specific individuals. For example, after the tragic death of Ella Adoo-Kissi-Debrah in 2013, a coronial inquest found (in April 2021) that excessive air pollution was a cause of death. The inquest drew attention to the impacts of air pollution, and the coroner called for enforceable national limits on air pollution and for greater publicity to be given to the negative effects of air pollution. While this was a verdict in a coronial Inquest and therefore not concerned with issues of liability, it is particularly interesting for its potential implications in relation to claims for personal injuries related to climate change.

Looking to the future

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.

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