Americas, Asia Pacific, UK & Europe
Insurance 2023 - the year ahead
The oil majors were the first to be hit by climate litigation but an increasing number of emission intensive industries will face similar challenges in 2023, depending on the outcome of jurisdictional battles in the US courts
There has been an ongoing debate for the last few years in the United States about whether climate litigation cases should be heard in Federal or State courts. However, after the Supreme Court first looked at this issue in May 2021 and ducked it, a final decision is now likely to be due in 2023. The decision, which could go either way, is likely to follow the views of the Solicitor General who has been asked to comment on the issue.
The oil majors are fighting to keep the cases in the Federal court as they are thought to be more sympathetic to their case.
However, the preference of the plaintiff bar is for cases to be heard in State courts where they feel decisions are more likely to go in their favour. Claimants in these lawsuits are looking for funds to ameliorate damage that has already been caused by climate change related natural catastrophes or put in place preventative measures in respect of future damage.
If the Supreme Court orders that the cases remain in the State courts, then this is likely to feed the plaintiff bar and lead to further litigation against other industries. Those already facing increasing attention include automotive companies, particularly in the US and Germany, cement manufacturers and increasingly architects, engineers and others in the construction industry. The building and construction industry accounts for 40% of global carbon emissions and litigants are looking to the industry to improve its processes and make buildings more sustainable. Other targets appear to include the plastics industry and the food industry.
Whatever the outcome, there will be growing pressure on businesses to take action on climate change issues.