The Full Federal Court recently overturned the primary judgement that the Commonwealth Minister for the Environment (Minister) owed a duty to take reasonable care to avoid causing personal injury to all children who ordinarily reside in Australia (Children) when exercising her powers under the Environmental Protection and Biodiversity Conservation Act 1999 (EPBC Act). The full judgement is available here and our previous report on the primary judge’s decision can be found here.
The Full Court allowed the appeal, finding that the Minister’s powers under the EPBC Act did not support the creation of a novel duty of care. Chief Justice Allsop cautioned that, as this case required a consideration of climate change policy, it was inappropriate for judicial resolution and that the creation of such duty should be decided through the political progress.
The case is one of several climate change cases currently litigated before the Federal Court of Australia. The degree to which this decision will impact the other cases is unclear. However, most of the claims are being brought under statutory causes of action such as misleading and deceptive conduct, rather than common law negligence and are therefore unlikely to be affected by the impact of the Full Court’s decision.
Clyde & Co partners, Dean Carrigan, Jacinta Studdert and Jacques Jacobs provide a summary of the matter and its implications going forward.
On or around 11 February 2016, Whitehaven Coal Pty Ltd applied to the Minister to expand their Vickery Coal Project. The Minister is required to assess Whitehaven’s application in accordance with s130(1) and s133 of the EPBC Act.
Eight school students residing in Australia (the Applicants) sought a declaration that a duty of care be recognised and an injunction to restrain the Minister from exercising her powers under the EPBC Act. They alleged that the Minister’s powers create a statutory duty of care and that the injunction is necessary to restrain an apprehended breach of that duty.
On 27 May 2021, the Court held at first instance, that the Minister has direct control over the foreseeable risk because it is her exercise of power upon which the creation of that risk depends. Therefore, there is a direct relation between the exercise of the Minister’s power and the risk of harm to the Children resulting from the exercise of that power.
The Court ultimately declared that the Minister has a duty to take reasonable care to avoid causing personal injury or death to Australian children. However, an injunction was refused.
The Minister’s appeal was heard by the Full Federal Court which unanimously found that the duty of care should not be imposed on the Minister for the following reasons:
Chief Justice Allsop:
The Applicants have already indicated that they will seek to appeal the decision and have until 12 April 2022 to apply for special leave to the High Court. We will be closely monitoring whether an appeal is allowed and if so, what decision will be made.
This decision demonstrates some of the conceptual problems that arise within the law of negligence (in its current form) when applied to climate change litigation and suggests that it is not the most suitable cause of action for activist climate change action, in comparison to other statutory causes of action that arise under the Corporations Act or the Australian Consumer Law. Future climate cases based on negligence will need to grapple with how a potential plaintiff is able to establish loss, resolve the issues of indeterminacy of liability and establish causation. Each of these problems will be difficult issues. It is of course possible that the High Court will take up Justice Beach’s comments on the development of the common law.
Australia’s climate change litigation activists are unlikely to be too disheartened by this decision and will be looking to continue to use litigation as a tool to change the behaviour of the government and corporate Australia. We expect Australian climate related litigation and regulatory action to continue to increase, evolve and expand in the next decade with an increased focus on the private sector, particularly focused on financial services, managed investment, fossil fuel, retail, travel and transport and construction/infrastructure sectors. This could include mass tort-based claims or securities class actions stemming from alleged inadequate climate transition planning and inadequate climate related disclosure. Further, Australian corporate regulators have indicated that climate disclosures are an area of priority and we are seeing an increase in greenwashing claims.
It is important for businesses to consider and monitor climate litigation, regulators’ comments and requirements on climate change related risks. Clyde & Co remains committed to mapping and understanding climate change risk alongside a growing network of cross-sector experts and collaborators, to help our clients navigate the rapidly evolving risk landscape they face. If you would like to discuss the issues raised and how this may impact your business, please contact Dean Carrigan, Jacques Jacobs and / or Jacinta Studdert. For more information on how Clyde & Co can assist with current and future high impact risks and liabilities challenging the resilience of organisations, see here.