By Nadine Coudel and Dr Richard Bater
In March 2019, Clyde & Co. launched its climate change report ‘Climate change: Liability risks, a rising tide of litigation‘. The report explores 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.
The report provides a broad overview of the evolving litigation risk landscape arising from the effects of climate change, identifying some of the key themes, controversies and legal hurdles.
The authors suggest that the significance of this trend should not be underestimated, with over 1200 climate change cases having been filed in more than 30 jurisdictions to date. As both litigation approaches and scientific evidence evolve, litigation increasingly represents a powerful tool in the hands of those who seek to attribute blame for contributing to effects of climate change or failing to take steps to adapt in light of available scientific evidence.
In as much as the physical risks of climate change raise both direct and indirect implications for a diversity of sectors, so too do the associated legal risks. As Clyde & Co Partner Nigel Brook remarks, “As the volume of climate change litigation grows and legal precedents build, new duties of care are emerging and the liability risk landscape is undergoing a shift which is likely to affect a wide range of commercial sectors”.
The authors classify litigation which has been emerging over the last two decades into three broad categories:
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.
The report also addresses novel approaches that claimants are adopting when bringing climate litigation, as well as the practical and legal considerations that these give rise to.
Finally, the report looks at global trends in climate litigation and their implications for businesses in different industries around the world, highlighting the issues which should be on companies’ radars over the months and years to come. The authors indicate that climate change litigation has already been deployed against companies beyond the oil and gas majors and suggest that this trend is likely to continue.
Litigation has advanced far from being targeted at first line ‘emitters’ to being used as a means of holding companies accountable for how they respond to the physical and financial risks of climate change. Clyde & Co. plans to explore these liability risks in greater depth in future reports.