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12 April 2019
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In this report 'a rising tide of litigation' we explore the liability risks that organisations have and continue to face as plaintiffs attempt to use the courts to further their cause or sue for damages. This article looks at the global trends in climate change litigation, revealed from the analysis of the rising tide of litigation, the novel approaches being deployed by climate change claimants more recently (particularly product liability claims) and courts’ responses to climate change litigation, which are likely to have implications for businesses globally.
Key trends in litigation
The following are some key trends in climate change litigation:
Key differences between jurisdictions
Differences are apparent between jurisdictions:
Implications for businesses
Trickle down effects of administrative cases
Administrative cases may have a direct impact on environmental policy-making. They open the doors for citizens to hold governments to climate commitments and to drive policy and legislative changes. If lawsuits succeed, governments may be prompted to review their environmental laws and commitments to ensure they are adequate, so as to lessen the risk of future litigation.
If governments adopt a firmer stance on climate change, either as a result of climate litigation or as a pre-emptive measure to ward against such claims being brought, there will be consequential legal and regulatory impacts on companies operating within those jurisdictions.
Depending on the industry, it may be sensible for businesses to keep a watchful eye on the course of strategic climate litigation, as there is the clear potential for judge-made law to have wide reaching implications on regulation surrounding GHG emissions, particularly where the government is targeted.
Impact on businesses beyond oil
Oil majors are currently facing threatened or pending litigation on a number of fronts and across a number of jurisdictions. Their liability insurers and reinsurers will undoubtedly be watching these cases with keen interest.
To date the targets of climate change litigation have primarily been governments and oil majors, but as the viability of climate change-related actions increases, so other businesses could find themselves in the crosshairs. Already claims have been brought or contemplated against car manufacturers and airlines for the physical effects of climate change. Other sectors may be targeted in due course.
Companies in a number of sectors may find themselves exposed not just to damages claims for climate change, but also the cost of defending litigation, the reputational harm of being associated with such litigation and the consequential impacts on operations and value.
Companies need also to consider reputational risks – customers and/or investors might begin to shun a company alleged to be acting in a way that is seen to be environmentally unethical.
The significance of these trends should not be underestimated, as litigation increasingly represents a powerful tool in the hands of those who seek to attribute blame for the effects of climate change, obtain compensation and drive change. download full report below.
12 April 2019
12 April 2019