Tort Law and Climate Change

Executive summary

Many of the costs of climate change take the form of damage to persons and property, which lies at the heart of tort law.[1] Since liability for climate change damage is not yet covered by international treaties, climate change litigation resorts to national law. The Dutch Supreme Court’s decision in Urgenda[2] has renewed interest in the use of tort law to address climate change, including as a pre-emptive measure to restrict further climate change-caused damages through the pursuit of declaratory and injunctive relief, as well as for strategic purposes. Claimants in several cases have brought tort claims against greenhouse gas emitting defendants, seeking monetary damages and injunctive relief to lessen the threat and financial burden of climate change.

Despite the emerging novel interpretation of tort law developed by courts in some jurisdictions, the LSE Global Trends in Climate Litigation: 2021 Snapshot[3] reports that there have been relatively few climate-related cases explicitly invoking tort law as their primary cause of action. In this context, English tort law has yet to play a substantial role in the effort to reduce greenhouse gas emissions and provide compensation for climate change damage.[4]

Key points in this section:

• Climate change has important legal implications for tort law and has provided some litigants with new grounds of litigation, particularly through the recognition of a duty of care to protect against the harms associated with climate change.
• There is a possibility for foreign claimants to bring litigation against UK parent companies for the actions of their foreign subsidiaries if they can prove that the UK parent company exercised a level of managerial control sufficient to give rise to direct liability for conduct of its foreign subsidiary.
• Climate-related greenwashing cases which rely on laws and regulations that prohibit false advertising can hold companies and states to account for their actions or products that misleadingly claim to address climate change.
• While there is potential for tort law to assist the UK in achieving net zero, certain barriers exist for climate change-related tort claims under English tort law: the establishment of a duty of care and the breach of such a duty; the issue of proving causation considering the diffuse nature of climate change; and the narrow concept of damage.

How climate change is stretching the traditional boundaries of tort law

Climate change has important legal implications for tort law, and has become a source of new laws, standards, and duties of care. Specifically, the recognition of a duty of care to protect against the harms associated with climate change has provided litigants with additional choice of grounds in litigation and has emboldened the novel use of existing tort laws by courts. As will be discussed below, the barriers to tort law action known under English tort law have in some cases been interpreted and stretched by courts in other jurisdictions when confronted by climate-related claims in order to adjust to the characteristics of climate change damage.

Evolving standards of care for emitters

Governments and corporations are targeted by a wide range of litigants in many jurisdictions, using myriad sources of legal duties. Some cases seeking increased climate mitigation ambition from states have been successful on the basis of tort law. An ‘unwritten duty of care’ of the state to prevent climate change was found in the Dutch Civil Code in Milieudefensie. Other claims currently being advanced rely on, for example, the German law of nuisance in Lliuya v RWE;[5] the Hawaiian law of nuisance, negligence, and trespass in City & County of Honolulu v. Sunoco;[6] and a novel duty of care to protect from the existential threat of climate change under Australian law in the Torres Strait Islanders[7] case(although the existence of this duty of care was rejected on appeal by the Federal High Court in Sharma).[8]

In parallel to litigation brought against governments, there is a growing recognition of corporate actors’ responsibilities to protect the climate, particularly in light of the development of standards for due diligence. An example of litigation that integrates the interpretation of corporate due diligence is Mileudefensie v Royal Dutch Shell,[9] where the District Court of the Hague found that Shell had a corporate duty of care and due diligence obligations under national tort law interpreted in light of the UN Guiding Principles on Business and Human Rights (UNGP), requiring it to reduce its CO₂ emissions by at least 45% by 2030. Considering the UNGP remain a soft law, non-binding instrument, efforts to introduce due diligence legislation such as the proposed EU Corporate Sustainability Due Diligence Directive could potentially help reduce the uncertainty about climate-related standards of care and what companies can do to reduce their risk of being involved in litigation. In this context, the UK government announced that it does not plan to replicate the proposed EU legislation, preferring instead to rely on the UK’s framework of corporate governance and reporting which requires UK companies to make annual disclosures which cover due diligence approaches where companies have these.[10]

To date, the most high-profile liability cases against corporations in common law jurisdictions have been delayed because they have been subject to a variety of jurisdictional disputes, such as the US ‘carbon major’ cases, or have not been successful on their merits. Attempts to bring tort law claims based on public nuisance, negligence and a new climate duty owed by defendants to plaintiffs to take reasonable care not to contribute to climate change have been rejected on procedural grounds in New Zealand in Smith v Fonterra, [11]  although the appeal was heard before the Supreme Court on 15-17 August 2022 and as of September 2022, the New Zealand Supreme Court is yet to give a reserved decision.[12] The New Zealand Court of Appeal initially saw no physical or temporal proximity, no direct relationship and no causal proximity between the damage and the defendants’ actions that would warrant such causes of action. In this context, the Court of Appeal cited the English tort case Wagon Mound No 2, which states that “damage is foreseeable only where there is a real risk of damage, that is one which would occur to the mind of a reasonable person in the position of the defendant and one which he would not brush aside as far-fetched”,[13] finding the harm alleged was not a reasonably foreseeable consequence of the defendant’s acts or omissions. English courts may reach a similar conclusion.

Climate change-related tort claims by foreign claimants

Though UK courts have not yet seen any climate-specific cases seeking to expand tort causes of action based on novel duties of care, some cases suggest how courts may approach these issues.[14] In the context of environmental damage, foreign plaintiffs have brought claims against UK companies and their subsidiaries in respect of environmental damages and associated losses suffered in foreign jurisdictions. To establish liability for foreign subsidiaries, the claimants in these cases have to prove that the UK parent company exercised a level of managerial control sufficient to give rise to direct liability for conduct of its foreign subsidiary. The UK Supreme Court in Vedanta Resources Plc[15] found that the liability of parent companies for the actions of their subsidiaries is not, by itself, a distinct category of liability in negligence, but simply a reiteration of “the legal principles as would apply in relation to the question whether any third party was subject to a duty of care in tort owed to a claimant dealing with the subsidiary”. In subsequent cases, UK courts were willing to consider novel applications of tort law in their relevant factual context. In Begum v Maran[16], the UK Court of Appeal found that it was at least arguable that two principles were applicable in a novel duty of care context: that the existence of a duty could not be extinguished by the involvement of third parties if those third parties acted in the way that was or could be anticipated; and that the usual rule that there is no liability in tort for the harm caused by the intervention of third parties does not apply where the defendant is responsible for a state of danger which may be exploited by the third party. This may pave the way for more novel arguments in the future.

Furthermore, the Climate-Related Financial Disclosure Regulations 2022, which set out new mandatory climate reporting requirements for UK companies, may help to obviate the difficulty of establishing a duty of care under English tort law. These requirements, which have been extended to cover the entire corporate group, may provide evidence of failings on the part of the parent company as it may show that the parent company has knowledge of and has assumed responsibility for the emissions of its subsidiaries.[17] This constitutes a possible sign of the increasing use of tort law claims to challenge the inadequacy of climate action by UK companies in foreign jurisdictions.

Implications for the legal sector

There is a growing understanding of emerging legal duties around climate risk in the legal community.[18] Several networks in the legal community have formed to bring attention to climate change issues. A number of law firms are now focused on climate litigation in the UK, including ClientEarth, Plan B, and the Good Law Project. Commercial lawyers are collaborating to encourage new private law climate obligations in commercial contracts. Supported by over 140 leading law firms and institutions globally, The Chancery Lane Project has published three editions of a ‘playbook’ on contract precedents and model laws, which are free to use for lawyers, businesses and policymakers. Programmes aimed at training the judiciary have been supported by bodies like Global Judicial Institute on the Environment such as the Judicial Portal, which is aimed specifically at training judges to effectively handle climate change claims.

How tort law can help to address climate change

Tort law can facilitate legal action targeting both corporate and public bodies for compensation of losses with considerable preventive effects. However, before addressing the positive trends emerging in the current legal landscape, it is necessary to consider some of the barriers tort law poses to achieving net zero.

Tort law barriers to addressing climate change

Certain barriers exist for climate change-related tort claims under English tort law: the establishment of a duty of care and the breach of such a duty; the issue of proving causation considering the diffuse nature of climate change; and the narrow concept of damage.^[19]

A major obstacle is proving causation, i.e., a sufficient causal link between the defendant’s activity and the damage sustained. There is already robust evidence that a causal relationship exists between the increase in greenhouse gas emissions and the increase in severity and frequency of severe weather events.^[20] However, establishing a defendant’s contribution to claimants’ losses has presented a key challenge in cases in which causal claims have been adjudicated.^[21] The obstacle lies in the fact that there is no direct causal connection between the emission of greenhouse gases by one specific emitter and the damage which has occurred. For climate change, damage is not linear but caused by multiple emitters that are located far from each other, and greenhouse gases do not directly affect the plaintiffs but cumulate in the atmosphere and over time cause the increase of global temperatures.^[22] Recent developments in climate science, in particular climate change attribution science, could support claimants in satisfying legal tests for causation and thus provide a crucial development for tort law climate litigation where no claims for remedies have been successful, opening the floodgate to the use of tort law in climate litigation.^[23]

Duties of care present the same issue as proving causation. Duty of care is the legal obligation to take reasonable care to avoid causing damage. Given the diffuse nature of climate change mentioned above and the potential lack of proximity between the alleged tortfeasor (the emitter) and any given claimant, it may be difficult to establish the existence of a duty of care of a particular defendant as well as the breach of any such duty.^[24]

The last fundamental difficulty with climate-related claims based on tort law lies in the specific nature of climate change damage. The mere release of GHG emissions and the consequent increase in temperature do not yet constitute damage according to tort law.^[25] Damage in the legal sense only arises when these events have a negative effect on persons (personal injury) or objects (property damage). Some jurisdictions are rather reluctant to grant compensation for future economic loss, including the UK. As climate science allows for greater accuracy in attributing the effects of climate change to specific causes, the courts may allow more claims to proceed, at least to the evidential stages.^[26] However, assuming such claims may be accepted, liability would not extend to the harm to the environment as such, it could not provide compensation for environmental harms caused by rising water and air temperatures (e.g., coral reef bleaching, species extinction).^[27] Furthermore, even though damaging effects may have been felt over the long term, liability is time-limited within the relevant statutory period. In Jalla v Shell, the Court of Appeal ruled on a 2011 oil leak in Nigeria from a pipeline managed by a shell company domiciled in the UK and found that the ongoing effects from an oil spill felt by the claimants after a decade could not be considered a continuing nuisance but rather only the consequent damage caused by the nuisance and, as such, were covered by the applicable limitation period.^[28]

Liability for climate change damages

Efforts in public international law to seek redress for loss and damage for climate change impacts under Article 8 of the Paris Agreement have helped trigger interest in tort law remedies for climate damage.[29] On 20 September 2022, Denmark became the first country to pledge ‘loss and damage’ finance to developing countries affected by climate change, committing 100 million DKK ($13m) to help victims recover and build resilience. Denmark’s move may inspire other major polluters to follow suit.[30] Strategic litigation brought at the national level is increasingly targeting particular corporations, mostly fossil fuel companies.[31] Underpinning these claims is the argument that greenhouse emissions from a small number of corporations have significantly contributed to climate change over time.

The application of tort law to climate change damages faces fundamental difficulties, including determining which courts are the correct venue to hear the claims and demonstrating that the claimants’ losses were caused by the defendant’s actions. There have been several attempts across jurisdictions that show the difficulties liability claims against emitters of greenhouse gases encounter. In the USA, several so-called ‘carbon major’ cases have already been brought to court against the major oil and gas companies in several states. The plaintiffs in these cases allege that the defendants were under a duty to disclose the dangerous effects of greenhouse gas emissions, and that failing to do so exacerbated the plaintiffs’ costs in adapting to climate change.[32] Of those claims which were based on tort law (primarily on public nuisance),[33] however, none were successful because the claimants could not establish a sufficient causal link between their damage and the defendant’s emissions. A similar case City & County of Honolulu v. Sunoco,[34] has been allowed to proceed to full trial – the first such case to do so. The inability to show causation was also the reason for the German District Court of Essen in Lliuya v. RWE to initially dismiss the damage claim of the Peruvian farmer against the German utility company RWE for the cost of measures to protect the town from the risk of flooding. The claimant is claiming 0.47% of the costs based on the defendant’s alleged contribution to cumulative global emissions. Ongoing advancements in attribution science may assist claimants in this respect. [35] Ultimately, a successful claim in this area likely lead to multiple group claims against companies with high greenhouse gas emissions, and so practitioners should remain alert to developments in this area.

Climate-washing and misleading disclosure claims

Climate-related greenwashing cases, which seek to hold companies and states to account for their actions or products that misleadingly claim to address climate change, have recently been gaining pace. The potential legal liability for this category of cases largely relies on laws and regulations that prohibit false advertising and are designed to protect consumers. Regulators in the UK have filed complaints against Shell before the UK Advertising Standards Authority (ASA) for classifying natural gas as a ‘clean’ fuel and misleading customers.[36] Similar claims have also been filed against Ryanair, where ASA concluded that the airline’s claims that customers choosing Ryanair over another carrier would have lower personal CO₂ emissions were ultimately misleading and in violation of the UK Code of Non-Broadcast Advertising, Sales Promotion and Direct Marketing.[37] Similar cases are likely to increase in the near future as companies’ net-zero commitments come under scrutiny, which may lead to direct liability for directors.[38]

Future trends – personal responsibility

There are now claims against company directors, trustees, and fiduciaries for failing to consider climate risks and impacts. Failure to take sufficient action in the face of the climate crisis is being recognised as a potential breach of fiduciary duties, in particular the duties under Sections 172 and 174 of the Companies Act 2006 to act in the best interests of the company and to exercise reasonable care, skill and diligence. In March 2022, ClientEarth started legal action against the board of directors of Shell in the first attempt to hold a company’s board of directors personally liable for failing to adequately prepare for the net-zero transition, arguing that their failure to properly prepare the company for net zero puts them in breach of their legal duties under the UK Companies Act.[39] There is also growing discussion in the literature regarding the responsibility of professionals including lawyers and accountants, who may be enabling climate-damaging activities, although no cases have been identified thus far.[40] As more new cases are brought, courts’ jurisprudence could develop, and new (individual) duties of care may emerge.

Overall, given the emerging, albeit limited role of tort law in climate litigation worldwide to challenge unambitious governmental and corporate climate action, climate change will be of growing interest to tort lawyers.

[1] Eduardo M. Peñalver, ‘Acts of God or Toxic Torts? Applying Tort Principles to the Problem of Climate Change’ (1998) Cornell Law Faculty Publications, Paper 730 <http://scholarship.law.cornell.edu/facpub/730> accessed 1 August 2022.

[2] The State of the Netherlands v Urgenda Foundation, (20 December 2019) Supreme Court of the Netherlands.

[3] Joana Setzer and Catherine Higham, ‘Global trends in climate change litigation: 2021 snapshot’ (July 2021) London: Grantham Research Institute on Climate Change and the Environment and Centre for Climate Change Economics and Policy, London School of Economics and Political Science.

[4] Douglas A. Kysar, ‘What Climate Change Can Do About Tort Law’ (2011) 41 Environmental Law 1.

[5] Lliuya v. RWE AG District Court of Essen Judgment of 15 December 2016 – 2O 285/15.

[6] City & County of Honolulu v. Sunoco LP et al, Case No. 20-cv-00163-DKW-RT (D. Haw. Mar. 5, 2021).

[7] Pabai Pabai & Guy Paul Kabai v. Commonwealth of Australia [2022] VID622/2021.

[8] Sharma v Minister for the Environment [2022] FCAFC 35.

[9] Vereniging Milieudefensie et al. v. Royal Dutch Shell PLC (26 May 2021) Hague District Court.

[10] Sara Feijao et al, ‘UK government does not plan to replicate proposed EU Directive on Corporate Sustainability Due Diligence’ (Linklaters, 13 June 2022). <https://sustainablefutures.linklaters.com/post/102hqhm/uk-government-does-not-plan-to-replicate-proposed-eu-directive-on-corporate-susta> accessed 8 August 2022.

[11] Caroline E. Foster, ‘Novel climate tort? The New Zealand Court of Appeal decision in Smith v Fonterra Co-operative Group Limited and others’ (2022) 24(3) Environmental Law Review 224.

[12] Michael John Smith v Fonterra Co-operative Group Limited, Genesis Energy Limited, Dairy Holdings Limited, New Zealand Steel Limited, Z Energy Limited, New Zealand Refining Company Limited and BT Mining Limited – SC 149/2021.

[13] Overseas Tankship (UK) Ltd v The Miller Steamship Co Pty Ltd [1967] 1 AC 617 (Privy Council) ‘Wagon Mound [No 2]’.

[14] Alexander Chaize, Iain Thain and Jesse Medlong, ‘Tortious claims and climate change: Where are we now?’

(DLA Piper, 31 January 2022) <https://www.dlapiper.com/en/middleeast/insights/publications/2022/1/tortious-claims-and-climate-change-where-are-we-now/> accessed 8 August 2022.

[15] Lungowe v Vedanta Resources plc [2019] UKSC 20.

[16] Begum v Maran (UK) Limited [2021] EWCA Civ 326.

[17] Naomi Hart and Owen Lloyd, ‘Climate change-related tort claims by foreign claimants’ (Essex Court Chambers, 18 May 2022) <https://essexcourt.com/publication/climate-change-in-law-current-perspectives-week-4> accessed 8 August 2022.

[18] Maryam Golnaraghi et al, ‘Climate Change Litigation – Insights into the evolving global landscape’ (The Geneva Association, 2021)  <https://www.genevaassociation.org/research-topics/climate-change-and-emerging-environmental-topics/climate-litigation> accessed 8 August 2022.

[19] Monika Hinteregger, ‘Civil Liability and the Challenges of Climate Change: A Functional Analysis’ (2017) 8(2) Journal of European Tort Law 238.

[20] Petra Minnerop and Friederike Otto, ‘Climate Change and Causation: Joining Law and Climate Science on the Basis of Formal Logic’ (2020) 27 Buffalo Environmental Law Journal 49.

[21] Rupert F. Stuart-Smith, Friederike E.L. Otto et al, ‘Filling the evidentiary gap in climate litigation’ (2021) 11 Nature Climate Change 651.

[22] Monika Hinteregger, ‘Civil Liability and the Challenges of Climate Change: A Functional Analysis’ (2017) 8(2) Journal of European Tort Law 238.

[23] Friederike E.L. Otto, Petra Minnerop et al, ‘Causality and the fate of climate litigation: The role of the social superstructure narrative’ (2022) Global Policy 1.

[24] Naomi Hart and Owen Lloyd, ‘Climate change-related tort claims by foreign claimants (Essex Court Chambers,  18 May 2022) <https://essexcourt.com/publication/climate-change-in-law-current-perspectives-week-4> accessed 8 August 2022.

[25] Monika Hinteregger, ‘Civil Liability and the Challenges of Climate Change: A Functional Analysis’ (2017) 8(2) Journal of European Tort Law 238.

[26] Alexander Chaize, Iain Thain and Jesse Medlong, ‘Tortious claims and climate change: Where are we now?’ (DLA Piper, 31 January 2022) <https://www.dlapiper.com/en/middleeast/insights/publications/2022/1/tortious-claims-and-climate-change-where-are-we-now/> accessed 8 August 2022.

[27] Monika Hinteregger, ‘Civil Liability and the Challenges of Climate Change: A Functional Analysis’ (2017) 8(2) Journal of European Tort Law 238.

[28] Jalla and Chujor v Shell International Trading and Shipping Co Ltd Shell Nigeria Exploration and Production Company ltd [2021] EWCA Civ 1559.

[29] Monika Hinteregger, ‘Civil Liability and the Challenges of Climate Change: A Functional Analysis’ (2017) 8(2) Journal of European Tort Law 238.

[30]Joe Lo, ‘Denmark becomes first country to pledge ‘loss and damage’ finance’ (Climate Home News, 20 September 2022) <https://climatechangenews.com/2022/09/20/denmark-first-country-pledge-loss-and-damage-finance/> accessed 23 September 2022.

[31] Maryam Golnaraghi et al, ‘Climate Change Litigation – Insights into the evolving global landscape’ (The Geneva Association, 2021) <https://www.genevaassociation.org/research-topics/climate-change-and-emerging-environmental-topics/climate-litigation> accessed 8 August 2022.

[32] County of San Mateo v. Chevron Corp. (2018)294 F.Supp.3d 934.

[33] American Electric Power Co. v. Connecticut (2011) 131 S.Ct. 2527.

[34] City & County of Honolulu v. Sunoco LP et al,Case No. 20-cv-00163-DKW-RT (D. Haw. Mar. 5, 2021).

[35] Rupert F. Stuart-Smith, Friederike E.L. Otto et al, ‘Filling the evidentiary gap in climate litigation’ (2021) 11 Nature Climate Change 651.

[36] Advertising Standard Authority UK Complaint against Royal Dutch Shell (2020) <https://www.asa.org.uk/rulings/shell-uk-ltd-g20-1049869-shell-uk-ltd.html> accessed 8 August 2022.

[37] ASA Ruling on Ryanair Ltd t/a Ryanair Ltd (2020) <https://www.asa.org.uk/rulings/ryanair-ltd-cas-571089-p1w6b2.html> accessed 8 August 2022.

[38] Commonwealth Climate and Law Initiative, ‘Climate Litigation: Briefing Note for Boards’ (2022) <https://commonwealthclimatelaw.org/ccli-cgi-climate-litigation-brief/> accessed 8 August 2022.

[39] ClientEarth Communications, ‘We’re taking action against Shell’s Board for mismanaging climate risk’ (ClientEarth, 15 March 2022) <https://www.clientearth.org/latest/latest-updates/news/we-re-taking-legal-action-against-shell-s-board-for-mismanaging-climate-risk/> accessed 8 August 2022.

[40] Joana Setzer and Catherine Higham, ‘Global trends in climate change litigation: 2022 snapshot’ (June 2022) London: Grantham Research Institute on Climate Change and the Environment and Centre for Climate Change Economics and Policy, London School of Economics and Political Science.