Behind the headlines: Climate Change Litigation Round-Up

This Dutch 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 claimants alleged that RDS breached the standard of care it owed to them by failing, in implementing globally applicable Shell Group corporate policies, to sufficiently commit to reducing its level of emissions to an appropriate level by 2030.  In 2021 the Dutch District Court agreed with the claimants and held that RDS had breached its duty of care.  We wrote a detailed briefing on this decision and its application to the UK here.

This claim received significant press attention at the time, and spawned several copy-cat claims (including in Belgium and Germany) (more on this below).  In March 2022, the RDS filed its Statement of Appeal and announced that it expected the appeal process would take between two and three years.  Under Dutch law, appeals are heard de novo, which means the decisions of the lower court will be fully scrutinised and, of course, may be overturned. 

This delay is notable because at the time the claim was filed the activists were pushing for significant changes to the Shell Group's emissions within ten years (i.e. by 2030): given the time that has already passed, and given that the appeal process may take a further two to three years, then from the claimant's perspective (even in a best case scenario) there has been five years of inaction and half the time to act has passed. 

In acknowledgement of this delay the claimants have continued to push for change, albeit via a PR route.  In April 2022 Milieudefensie, through its lawyers, wrote an open letter to the directors of Shell plc to criticise the Shell Group's decision to continue to fight the claim in the Netherlands, suggesting that (i) the Shell Group could become liable for "unprecedented liability risks" in respect of its carbon emissions, and (ii) Shell plc's directors could become personally liable for their perceived failure to do what is necessary to meet the goals of the Paris Agreement.  In parallel with this effort, in the UK ClientEarth also wrote to the directors of Shell plc alleging that the directors had failed to implement a climate strategy that is in-keeping with the goals of the Paris Agreement.  ClientEarth's letter had slightly more punch, however, as it was the precursor to a derivative action filed in February 2023 (we will shortly be publishing a briefing on the subject of derivative actions in the UK, and will address this ClientEarth claim in detail).

Relatively little media attention was given to the decision to appeal and until the appeal process ends there is little to report.  It is interesting to see both Milieudefensie and ClientEarth have continued to draw media attention to the claim via plugging the gap with media campaigns and alternative legal strategies.  The claim, while stalled for a prolonged period of time, has needed to be supplemented by PR strategies (and secondary litigation) in order to keep the claim in the limelight.

As noted above, Milieudefensie spawned copycat claims.  Notably, in Germany, Greenpeace Germany and Deutsche Umwelthilfe issued several claims against Volkswagen, BMW, Daimler and Wintershall Dea in respect of their own carbon emissions.  The claims sought to prohibit the three car manufacturers from producing combustion engine cars by 2030 (five years earlier than a EU-wide directive to effectively ban the manufacture of traditionally powered cars) and also to prevent Wintershall Dea from exploring for new petroleum reserves from 2026.  The claimants alleged that the two deadlines were necessary to meet the goals of the Paris climate accords, as well as existing domestic German law.  A failure to do so, it was argued, was a breach of the companies' duty of care to German citizens.  We wrote a briefing on these claims when letters of claim were issued in 2021, which can be read here.

These claims are now making their way through the German courts, and we have seen that they have met resistance once they have been scrutinised.  In the claim against BMW, it was determined earlier this month that in taking a further five years to cease producing combustion engine cars (i.e. in line with BMW's legal obligations) "at present there is no threat of illegal encroachment" on the rights of German citizens.  The claim against Volkswagen has faced similar challenges.

However, while these claims received significant media attention when issued, the two decisions in favour of BMW and Volkswagen have received almost no attention in the English-language media.  This illustrates PR challenges that defendants face in climate change litigation: legal vindication may offer little gain from a "positive" PR perspective as they simply fly under the radar (accepting, of course, that in the particular case of these car manufacturers they may be perfectly happy for these claims to receive little attention).

We wrote briefings on two unsuccessful antipodean claims in early 2022, Minister for the Environment v Sharma and Smith v Fonterra.  In both of these claims, the (successful) first instance decision attracted significantly more media attention at the time than the eventual (unsuccessful) appeal.  In summary:

• Sharma: in this Australian claim, a major infrastructure project (a coal mine extension) required the approval of the Minister for the Environment. A group of children brought a tort claim (i.e. a private law claim) against the Minister, a claim which highlighted the intergenerational effect of climate change. They argued that the vulnerability of the young claimants gave them standing to bring a claim. In our briefing we focused on the "hybrid" nature of the claim as the defendant's conduct that the claimants objected to was more naturally aligned with a judicial review claim than a private law claim.  On appeal, the Full Federal Court of Australia had considerable concerns about the appropriateness of a claimant asking the judiciary to restrain Government policy over what the Court considered to be a "core policy issue", drawing on concerns also raised by the New Zealand Court of Appeal in Fonterra (see below).  Ultimately, the Court considered climate change to be the responsibility of the executive and legislature, rather than the judiciary and declined to allow the claim to proceed.
  
  
• Fonterra: in this New Zealand claim, an activist pursued a novel climate change-related claim against several significant greenhouse gas emitters. The New Zealand High Court declined to strike the claim out on the basis that the defendants may have breached an "inchoate" climate change duty of care, whereas the New Zealand Court of Appeal struck out the claim on the basis that it was inconsistent with fundamental principles of New Zealand (and English) common law.  We wrote a briefing on the Court of Appeal's decision (which focussed on the contrast with Milieudefensie) back in 2022 as it the claim may give an indication of how an English court would approach a similar claim, given the close jurisprudential connections.

In the case of Fonterra, the Court of Appeal's decision was referred to the New Zealand Supreme Court, and a three day hearing was convened in August 2022.  Interestingly, both the claimant and the defendants dwelled on Milieudefensie and Sharma in their written submissions, highlighting the way these novel climate change claims have a "horizontal" impact beyond the jurisdiction in which they are heard.  The decision of the Supreme Court is still pending. 

Given the level of media attention granted to the successful first instance decisions verses the unsuccessful appeals, it seems likely that if the claimant fails to overturn the Court of Appeal's decision, then this claim will go under the radar.  However as we noted in our briefing on Fonterra English legal observers should give this claim attention given the similarities between the New Zealand and English legal systems.  Certainly, when it comes to novel tortious claims the English legal system has invited novel tort claims in recent years (e.g. via the parent company liability decisions of Vedanta and Okpabi, which have made it easier (procedurally) for claimants to bring novel transnational tort claims, and also through the older Fairchild authorities which make it simpler for claimants to meet the threshold for causation in certain circumstances).  Accordingly, even if the New Zealand Supreme Court chooses to uphold the decision of the Court of Appeal, a similar claim before the courts in England may face fewer barriers.  

Of course, climate change activists will not necessarily see the lack of attention when claims fail as being a problem: as noted at the start of this briefing, the primary aim in many cases seems to be to generate attention to perceived corporate and government inaction in the face of permanent and disastrous climate change.  However the fact that these legal claims do fail so regularly cannot be ignored.  This approach may lead to a "boy who cried wolf" situation where meritorious climate change claims are, in fact, overlooked and climate change litigation fails to both draw attention and lead to a legal victory. 

That said, perhaps climate change activists may wish to draw attention to this failure.  If climate change litigation is incapable of driving genuine change then, logically, it falls on Parliament and regulators to make the necessary changes to tackle climate change.  It may therefore be important for activists to showcase failure in the same way that they currently showcase (potential) success.