Climate Change Liability Some issues from a London perspective

Climate Change LiabilitySome issues from a London perspective

Richard Lord Q.C.13 September 2012

Why might this be of interest ?

Looking backwards – analysis of rights and responsibilities for past actions

Looking forward – a key driver for future behaviour

A part of the matrix of scientific, political, economic and ethical considerations

What do we mean by liability

Determination of legal rights and obligations

But narrowed to leave out contractual obligations

Widened to include soft law No such thing as climate change

law

The ultimate cross cutting issue

Interlocks with security, food, water, all sorts of CPRs/ESCRs and economic issues

Not everything which may affect or be affected by CC

Still a broad mix of public/administrative law, private law, constitutional and trust law, criminal law, competition law

Law and Politics

Not here looking at liability under UNFCCC. But its provisions very relevant Driven by scientific imperatives But only so far – it is what is politically

possible and not what is necessary Litigation is a blunt instrument – but

more effective than a soft one. Convergence of public and private

law concepts (CBDR, Inter and intra generational equity, precautionary principle, “no harm”)

Effective Regulation

Ineffective Regulation

Limited effects of CC

Questions of liability - minor importance

Questions of liability - moderate importance

Significant effects of CC

Questions of liability - moderate importance

Questions of liability - major importance

THE RISK QUADRANT

Risk quadrant – further thoughts (1)

Iterative – effective regulation is often challenged but should lead to less damage

BUT in 2012 past that stage – UNFCCC framed round mitigation – now more and more focus on adaptation and even compensation within UNFCCC

Irony that “political question” and “pre-emption” doctrines rolled out in US which has done least to legislate at least at federal level.

Risk quadrant – further thoughts (2)

Also iterative because CREDIBLE THREAT of liability drives behaviour change

Business often has Longer time lines Less clouded visionthan Government

INSURANCE PERSEPCTIVE

Key roles of insurers - property and liability – (Steadfast v AES) so first and third party risks

Also significant costs exposure under “duty

to defend” Increase in liability claims for

“secondary liability” claims – architects, engineers, public authorities etc.

Insurers – not just “Business as Usual”

Significant opportunities for insurers who understand the market Conventional products (CGL/EIL)

adapted to Climate Change Risks New products – CAT bonds,

microinsurance Leaders – Swiss Re:, Munich Re:

Zurich, Geneva Association etc

Liability (1) - Public

Numerous Often unglamorous - though see

Platform, People and Planet v HM Treasury (2009)

FSM v Prunerov (2010)

Public law (continued)

Varied Pendulum swing or type of action

(claim by or against industry) swings with regulatory climate

Environmentalists shut down coal fired power stations

Civil society actions wider than traditional environmentalism

War of attrition ?

Business challenges to regulation. See Decision of 26 June by USCA (DC Circuit) –

Coalition for Responsible Regulation v EPA – EPA Rules upheld

Decision of 21 August 2012 by USCA (DC circuit) EME Homer v EPA. EPA Rules held to be invalid

Public International Law

Largely concerned with Treaty Rights but Question of invocation of “no harm”

principle at a state/state level (FIELD report October 2010)

September 2011 Palau called for an ICJ advisory opinion on the obligations and responsibilities of states under international law to avoid transboundary harm caused by greenhouse gas emissions

Liability (2) Private (primary)

Holy Grail of environmentalists Claims in negligence and nuisance Interesting and difficult questions of

causation, foreseeability, negligence.

US claims have actually run into the sands on questions of justiciability and standing – AEP, Comer, Kivalina

But for other problems see Gerrard (2011) Yale Law Journal 135

Liability (3) Information

Disclosure and information and risks (Client Earth invocation of Financial Review Reporting Panel, US S-K 101). Pressures from Regulators Environmentalists/Civil Society Shareholders

R2I (Right to Information) Art 10 ECHR Art 19 ICESCR

The wrong information

False information – advertising regulations

False information – conspiracy claims as advanced in Kivalina and Comer

Liability (4) – Secondary private liability

Failure to take account of effects. Primary target – public authorities, engineers, builders and professionals Dams Katrina Canal Breaches

Litigation (2009) Fire breaks Buildings

Liability (5) -Competition and anti-trust

Still in infancy But possible rise of liability in

relation to unfair competition by “high carbon” economies externalising cost

Liability (6) – Public Trust

An ancient doctrine Reinvigorated with US “Youth

Filings” May 2011 But no success yet – eg Montana

Supreme Court decision refuses to declare the atmosphere to be subject to a public trust (June 2011)

Liability (7) Soft law

Key driver “Who cares wins”

OECD Equator Principles Explosion of corporate conduct

charters Lateral thinking – problems in

Uganda, solutions in New York

Liability (8) Rights based

Constitutional New constitutions have express

environmental rights – Kenya, Ecuador (plus standing for “Pacha

Mama”) Human Rights “Ubi ius.....” – BUT is this true ??? Climate change is a Human Rights

issue – but will this translate into remedies ?

Other possible trends

Convergence of private and public law standards

Incremental status of Human Rights standards such as Ruggie principles from guidelines to de facto benchmarks of reasonable conduct

Developing country muscularity

Frustration – Developing countries impacted, developed countries emissions

But lines blurred – many are both emitters and “victims” – India, China, etc. etc.

Judicial activism in India, Philippines etc (1993 Oposa v Factoran – Rights of future generations)

And more teeth ?

More damages ? Enforcement abroad ? Assets at home ? Chevron v Ecuador – the shape of

things to come ?