Climate Change Liability Some issues from a London perspective

1. Climate Change LiabilitySome issues from a London perspective Richard Lord Q.C. 13 September 2012

2. 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

3. 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

4. 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

5. 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”)

6. THE RISK QUADRANT

7. 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.

8. Risk quadrant – further thoughts (2) • Also iterative because CREDIBLE THREAT of liability drives behaviour change • Business often has • Longer time lines • Less clouded vision than Government

9. 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.

10. 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

11. Liability (1) - Public • Numerous • Often unglamorous - though see • Platform, People and Planet v HM Treasury (2009) • FSM v Prunerov(2010)

12. 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

13. 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

14. 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

15. 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

16. 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

17. The wrong information • False information – advertising regulations • False information – conspiracy claims as advanced in Kivalina and Comer

18. 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

19. 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

20. 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)

21. 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

22. Liability (8) Rights based • Constitutional • New constitutions have express environmental rights – • Kenya, • Ecuador (plus standing for “Pacha Mama”) • Human Rights • “Ubiius.....” – BUT is this true ??? • Climate change is a Human Rights issue – but will this translate into remedies ?

23. 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

24. 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)

25. And more teeth ? • More damages ? • Enforcement abroad ? • Assets at home ? • Chevron v Ecuador – the shape of things to come ?