Climate litigation trends: three significant developments you need to know about

By Mark Smyth, Heidi Asten, Tim Stutt, Maxine Byrne, Georgia Roy and Jacob Lerner

It has been an active 12 months in the climate change litigation space, both in Australia and internationally. The political and legal landscape is rapidly evolving and the need to keep pace with these developments is presenting companies with new strategic challenges.

In this update, we provide a summary of three recent key developments in climate change litigation in Australia and New Zealand.

Key takeaways

1. A class action against the Commonwealth Government has been commenced on behalf of a group of Torres Strait Islander communities in relation to climate change impacts – Pabai Pabai & Anor v Commonwealth of Australia (VID622/2021) (Pabai Pabai).
2. The appeal hearing for Sharma v The Minister for the Environment [2021] FCA 560 (Sharma) was heard in October. The Commonwealth made detailed arguments against the appropriateness of recognising a novel duty of care in the context of climate change, as well as with respect to distinguishing Scope 1 and 2 emissions from Scope 3 emissions.
3. The New Zealand Court of Appeal in Smith v Fonterra Co-Operative Group Limited [2021] NZCA 552 (Fonterra), upheld the strike out of a claim for public nuisance, negligence and a proposed new tort described as “breach of duty” brought against seven New Zealand companies in relation to their contribution to climate change.

We have published separate updates on other recent Australian decisions relating to the refusal of a coal mine and upholding the approval of a gas project.

Pabai Pabai – alleged novel duty of care owed by the Commonwealth

On 26 October 2021, a landmark class action against the Australian Government was commenced by First Nation leaders on behalf of Torres Strait Islanders in relation to climate change impacts, in particular, from rising sea levels. The claim is the first climate class action in Australia brought by First Nation leaders.

The claim alleges breach of a novel duty of care owed to Torres Strait Islanders requiring the Commonwealth “to take reasonable steps to protect them, their culture, and their environment from harms caused by climate change.” Interestingly, the alleged duty of care is said to arise not from the Commonwealth’s position as the federal government per se, but from ordinary knowledge and foreseeability of harm principles. Factors asserted as relevant to the duty and alleged breach include knowledge having regard to the Commonwealth government’s ratification of the Paris Agreement and access to expert reports including reports prepared by government Departments, and peer reviewed literature.

The claim was developed in conjunction with Phi Finney McDonald and the Urgenda Foundation – the entity which successfully sued the Dutch Government in 2015 in relation to its greenhouse gas emissions targets – and is supported by public interest advocacy organisation, Grata Fund.

Sharma appeal – alleged novel duty of care owed by the Minister of the Environment

The Sharma appeal concluded on 20 October 2021 after a three day hearing. The appeal was against the decision of Bromberg J in May this year, which found that the Minster for the Environment owed a duty of care to Australian children who might suffer potential “catastrophic harm” from the climate change implications of approving the extension to the Vickery coal mine in New South Wales. Our note on the decision can be accessed here.

The key issues the subject of argument in the appeal included:

1. Appropriateness of recognition of duty of care:

• The Commonwealth made forceful arguments that the Courts should not be involved in a process that is centrally a function for elected ministers, and that the imposition of a duty of care would inhibit the Minister’s exercise of her powers. In particular, that decisions on approvals of emissions-intensive projects are subject to existing statutory and judicial review supervision, and further duties beyond these raise political and policy questions which are unsuited to a step change in the development of the common law.

2. The existence of a duty of care:

• The Commonwealth’s arguments focussed on the Minister’s lack of control over the alleged future harm to the children by her decision to approve the coal mine. In particular, there was debate about whether it was appropriate to consider Scope 3 emissions, which would be the majority of the emissions created from the mine and thus the primary driver of harm to the plaintiffs.
• There was also debate of the reasonable foreseeability of the harm to the children from approving the mine. Scope 3 emissions were also relevant here, with the Commonwealth arguing that Scope 3 emissions could not be said to be “caused” by the Minister’s decision to approve the mine.

3. The extent of the alleged duty of care:

• Even if there were a duty of care, the Commonwealth argued that it should not extend to Scope 3 emissions, and in any event that it was inappropriate to consider that any “infinitesimally” small CO2 emission could provide the “tipping point” for global emissions, such that there was a duty of care to prevent such emissions.

The Court reserved its judgement.

Fonterra appeal – alleged novel duty of care owed by companies and a new tort

Background

The appeal was commenced by the appellant, ostensibly on behalf of relevant iwi (Māori tribes) who are suffering alleged damage to their tribal lands due to the effects of climate change, against seven New Zealand companies which emit greenhouse gases as part of their operations. The applicant brought three actions in tort, alleging that the release of greenhouse gases by the respondents is human activity that has contributed and will continue to contribute to “dangerous anthropogenic interference with the climate system and to the adverse effects of climate change”.

The three claims were framed as follows:

• Public nuisance: the applicant contended that the interference with the public rights to health, safety, comfort, convenience and peace has caused or is likely to cause him special damage because of his interest according to custom and tikanga in a block of land situated on the coast at Wainui Bay, that contains customary sites and resources that are of cultural significance to the applicant and are in close proximity to the coast.
• Negligence: the respondents owed the applicant a duty to take reasonable care not to operate its business in a way that would cause him loss by contributing to dangerous anthropogenic interference with the climate system.
• New tort: the respondents owed a duty to cease contributing damage to the climate system though their emissions, or production and exportation of coal and fuel products.

The applicant sought declarations that each of the respondents has unlawfully caused or contributed to the effects of climate change or breached duties said to be owed to the applicant and an injunction requiring the respondents to produce or cause zero net emissions from their respective activities by 2030.

Summary of decision

The New Zealand Court of Appeal found in favour of the respondents, dismissing the appeal of the striking-out of the negligence and public nuisance claims and striking out the novel duty of care claim.

Some key takeaways are:

• The Court provided a lengthy explanation on why common law tort proceedings were an inappropriate response to climate change. Although acknowledging the threat climate changes poses, the Court suggested that the policy responses required to address it were both beyond the capacity, and outside the scope, of a court’s appropriate constitutional role.
• Public nuisance claim: While the harms of climate change – being interference with the rights to public health, safety, comfort, convenience and peace – were held to be recognised harms in public nuisance, the Court held that there was no way to connect the alleged harm with the activities of the respondents. The Court also found that issuing an injunction to require the respondents to reach net-zero emissions would not lessen the purported harm.
• Negligence claim: The negligence claim was struck out on several bases, with the Court finding that any novel duty of care was “clearly untenable”, given the lack of proximity between the plaintiff and defendants, the indeterminacy of liability, as well as policy grounds that militated against the finding of a duty of care.
• New tort: The Court held this claim was pleaded as a “bare assertion” without any attempt to define its scope. While it was speculated (and partially accepted at first instance) that scientific advances may assist the plaintiff in proving specific harms as a result of the defendants’ actions, the Court held that was no bar to a strike-out application. Instead, given the lack of specificity (both legally and factually), the proposed new duty was also struck out.