By -

Snapshot

  • Australia has the second-highest level of climate change litigation activity worldwide, after the United States.
  • A new briefing paper from the Law Society of NSW considers the trends, key cases and future directions in climate change litigation.

In July 2021, while all eyes were on the Olympic Games in Tokyo, a report from the London School of Economics awarded Australia a podium result in a very different arena: climate change litigation.

The report, by the university’s Grantham Research Institute on Climate Change and the Environment, analysed climate change litigation globally since 1986. It found that outside the United States, Australia had recorded the highest level of climate change litigation activity, with 121 cases as of 31 May 2021.

Experts have suggested several reasons for Australia’s position on the climate change litigation leader board. These include Australia’s sophisticated and independent legal institutions, high profile international cases, the adoption of the Paris Agreement, advances in climate change science, and the severe climate change impacts in the region.

Climate law as ‘hot law’

The Grantham Research Institute report stated that beyond the quantity of cases, ‘an unprecedented number of key judgments with potentially far-reaching impacts were issued in the past 12 months’. Justice Brian Preston, Chief Judge of the Land and Environment Court of NSW, made a similar observation during a Law Society Thought Leadership event in March 2021, stating that ‘the law relating to climate change and its consequences is rapidly evolving’. On this basis, his Honour described climate law as ‘hot law’.

To help make sense of this dynamic area of law, the Law Society established an expert climate change and the law working group in early 2021, which included members of its Litigation Law and Practice, Environmental Planning and Development, Diversity and Inclusion, and Human Rights Committees. The working group collaborated on a briefing paper, Climate Change Litigation: Trends, Cases, and Future Directions, which was launched at a second Law Society Thought Leadership event on climate change and the law on 29 November 2021. The briefing paper is designed to complement the two Thought Leadership events, and to shed light on the trends, cases, and future directions of climate change litigation.

This article provides an overview of the briefing paper’s findings. A link to the full paper, which contains references for all sources referred to here, can be found at the end of the article.

Climate change litigation defined

In assessing the scope and impact of climate change litigation, one difficulty many authors face is how to define the term. Setzer and Vanhala observed in 2019 that there are ‘as many understandings of what counts as ‘climate change litigation’ as there are authors writing about the phenomenon’. For the purposes of the briefing paper, the definition of climate change litigation was borrowed from the United Nations Environment Programme (‘UNEP’) Global Climate Litigation Report: 2020 Status Review. The UNEP report considered climate change litigation to include cases that raise material issues of law or fact relating to climate change mitigation, adaptation, or the science of climate change. UNEP further stated that ‘[s]uch cases are brought before a range of administrative, judicial, and other adjudicatory bodies. These cases are typically identified with keywords like climate change, global warming, global change, greenhouse gas, GHGs [greenhouse gases], and sea level rise’.

Key trends and cases

The Law Society briefing paper identified four trends in climate change litigation, and provided a selection of Australian and international case studies to illustrate each trend.

1. Corporate disclosure and directors’ duties

Recognition of the financial risks of climate change has grown more acute in recent years. In 2017, the Taskforce on Climate-related Financial Disclosures (‘TCFD’), which was created by the G20’s Financial Stability Board, published disclosure recommendations structured around four thematic areas: governance; strategy; risk management; and metrics and targets. The TCFD framework has since become the global standard for climate-related disclosures, and has been cited by the Reserve Bank of Australia, ASIC, APRA, and the ASX Corporate Governance Council.

Alongside regulatory developments, there have been a number of high-profile actions brought against corporations in Australia, and in one case the Australian Government, for misleading or inadequate disclosure of climate-related risk. McVeigh v Retail Employees Superannuation Trust (Federal Court of Australia, NSD1333/2018) (‘McVeigh), which was settled prior to hearing, led to an acknowledgement from the respondent that ‘climate change is a material, direct and current financial risk to the superannuation fund across many risk categories’. The respondent also committed to nine actions, including reporting on climate related progress in line with TCFD recommendations. (For more on the McVeigh case, see Millar, Coutts and Delaney ‘The Rest climate case settlement: a precedent by any other name?’ 73 Law Society of NSW Journal, December 2020, 80-81.)

In the ongoing matter of Kathleen O’Donnell v Commonwealth of Australia and Ors (Federal Court of Australia, VID482/2020) (‘O’Donnell) the owner of five exchange-traded Australian Government bonds has brought proceedings alleging the Commonwealth has failed to disclose climate change risks to bond investors, and by doing so has breached its duty of disclosure, and misled and deceived investors. Relief sought by the applicant includes an injunction restraining the Commonwealth from promoting or issuing retail bonds until relevant climate risk disclosures are made.

2. A ‘rights turn’ in climate change litigation

In October 2021, the UN Human Rights Council recognised, for the first time, that having a clean, healthy and sustainable environment is a human right. This follows several statements and resolutions from international treaty bodies and experts about the threat that climate change poses to human rights. Peel and Osofsky have argued there is a concurrent trend ‘towards petitioners increasingly employing rights claims in climate change lawsuits, and a growing receptivity of courts to this framing’, and labelled this a ‘rights turn’ in climate change litigation.

Waratah Coal Pty Ltd v Youth Verdict Ltd [2020] QLC 33 (‘Youth Verdict) is the first climate change case in Australia to rely on domestic human rights legislation. The case relates to an application to develop a thermal coal mine in the Galilee Basin. In an initial decision, the Land Court of Queensland found that both it, and the Minister for Natural Resources Mines and Energy, were obliged to give proper consideration to human rights in exercising their respective functions. The objections to the mine are scheduled to be considered at a hearing in 2022.

The ‘rights turn’ in climate change litigation is also evident in other jurisdictions. One prominent international matter from 2018 is Urgenda v State of the Netherlands (‘Urgenda’), in which the Dutch Supreme Court upheld an earlier decision ordering the Netherlands to limit its emissions by 25% by 2020. The Court held that the risks of climate change fell within the scope of the European Convention on Human Rights, particularly the right to life (Article 2), and private and family life (Article 8). The rights-based aspect of the decision has been closely monitored by international observers. The UN Special Rapporteur on Human Rights and the Environment described Urgenda as ‘the most important climate change court decision in the world so far, confirming that human rights are jeopardised by the climate emergency and that wealthy nations are legally obligated to achieve rapid and substantial emission reductions’.

3. Climate science in the courtroom

Lawyers involved in climate change cases often enlist credible, well-qualified experts to provide expert evidence on climate science and, in some cases, the likely contribution to climate change of a proposed development. A recent example of climate science expertise informing judicial decision making can be found in Bushfire Survivors for Climate Action Inc v Environment Protection Authority [2021] NSWLEC 92. The applicant relied in part on expert scientific evidence from former Australian Chief Scientist, Professor Penny Sackett, on the links between bushfires and climate change. Professor Sackett opined that many individual extreme events can be directly linked to climate change, including the devastating Australian 2019-20 bushfires, which she stated were at least 30% more likely because of climatic changes caused by humans.

In his decision, Preston CJ noted that Professor Sackett’s evidence and analysis of the causes and consequences of climate change was not contested by the respondent. His Honour held the respondent had a duty to develop environmental quality objectives, guidelines and policies to ensure the protection of the environment from climate change. The NSW Environment and Energy Minister subsequently announced that the NSW Government will not be appealing the decision.

4. A new generation of climate change litigants

The applicants in Sharma v Minister for the Environment [2021] FCA 560 (‘Sharma) were eight Australian children who sought an injunction to restrain the Commonwealth Minister for the Environment from approving the expansion of a greenfield coal mine. The applicants successfully argued the Minister owes children a novel duty of care to protect them from the risks of climate change. In his judgment, Bromberg J considered a range of potential harms that children in Australia may experience as a result of the direct, indirect, and flow-on impacts of climate change.

His Honour found that ‘[t]he risk of harm in question is reasonably foreseeable even without regard to the unparalleled severity of the consequences of that risk crystallising’.

Several other Australian cases have been initiated by children and young people, including McVeigh, O’Donnell, and Youth Verdict. At the international level, in October 2021 the UN Committee on the Rights of the Child responded to a petition filed by 16 children against five countries. The Committee determined that while a State party can be held responsible for the negative impact of its carbon emissions on the rights of children both within and outside its territory, the petitioners’ complaints were inadmissible as domestic remedies had not been exhausted.

Future directions in climate change litigation

An April 2021 report published by the Geneva Association found climate change litigation is ‘increasing in volume, scope and geographical spread’ around the world. In relation to Australia, experts have predicted that claims against major emitters and financial institutions in Australia will increase as communities and shareholders seek accountability for their role in emissions mitigation. Other factors that may increase the incidence of climate change litigation in Australia include the recognition of new duties of care, as occurred in Sharma, and litigants’ use of state and territory human rights instruments.

In addition to a potential rise in the number of cases, the Law Society briefing paper identified a number of factors that may influence climate change litigation in coming years. This includes advances in climate attribution science, by which a defendant’s emissions are linked to climate change overall and to specific impacts. As this science develops further, it is likely it will play a pivotal role in climate change litigation, with potential implications for the award of damages against individuals, entities, and governments.

There are also indications that climate change cases in Australia will focus on allegations of ‘greenwashing’, or the misrepresentation or exaggeration of the extent to which an investment, strategy or other type of product is environmentally friendly. In a 2021 memorandum of opinion, Noel Hutley SC and Sebastian Hartford Davis stated that ‘[t]he increasing number of ‘net zero’ commitments brings into focus an acute litigation risk’, as an absence of reasonable grounds for the commitment may lead to a finding that a company and its directors engaged in misleading or deceptive conduct or other breaches of the law. (See Hutley & Hartford Davis’ article, ‘Directors’ duties and the risky business of greenwashing’ 79 Law Society of NSW Journal, July 2021, 82-83.) The litigation risk arising from a net zero commitment is set to be tested in a Federal Court case, Australasian Centre for Corporate Responsibility v Santos Limited (Federal Court of Australia, NSD858/2021), which was filed on 25 August 2021.

Due to the transnational nature of climate change impacts, several cases to date have been lodged with international adjudicatory bodies, such as UN treaty bodies and National Contact Points for the OECD Guidelines for Multinational Enterprises. One such matter is a pending claim brought by a group of eight Torres Strait Islanders against Australia to the UN Human Rights Committee, in which the claimants allege that Australia’s contribution to emissions and lack of adequate protective countermeasures has violated several human rights.

The UNEP has identified several reasons why climate change cases before international bodies are ‘likely to continue to proliferate’. This includes: the abundance of favourable soft law available to plaintiffs in international fora, including the Paris Agreement; the availability of strategic opportunities that may be unavailable in national courts; and the attractiveness, to strategic litigants, of a potentially influential ruling from an international body. There are also proposals for the International Criminal Court to take on jurisdictional responsibility for a new crime of ‘ecocide’, although this process is still in its early stages, and the result is far from assured.

Climate change litigation is a big topic, and this article has only provided a brief overview. Any Law Society members interested in learning more about climate legal risk considerations, and the implications of climate change litigation for lawyers and their clients, are encouraged to download the full briefing paper, available at the link below.

Download the Law Society of NSW Briefing Paper, Climate Change Litigation: Trends, Cases, and Future Directions, at: https://www.lawsociety.com.au/climate-change-litigation

 


Andrew Small is a Policy Lawyer for the Law Society of NSW.