Emissions reduction litigation against commercial firms is mostly illegitimate

Not a single European country is doing enough to try and keep global warming below 1.5 C°. The majority of industrial greenhouse gas emissions come from a limited number of huge firms. NGOs, such as Dutch Milieudefensie, have stepped into the breach created by allegedly “dysfunctional politics” by suing companies to force them to reduce their emissions. The legal basis for such claims is usually a combination of tort law and fundamental rights, like the right to life or property. But even though the claims are based on tort law, plaintiffs do not pursue damages, but injunctions, ordering companies to adopt emissions-reduction schedules determined by the court. The most spectacular cases have been the Hague litigation against Shell, where the court of appeal held that Shell has a duty to combat climate change even though the court could not determine a specific emissions schedule. German NGOs were less successful in suits against BMW, Volkswagen, and Mercedes that sought to force a phase-out of combustion engines by 2030.

This blogpost will argue that, even when politicians abdicate their responsibility to regulate climate change, emissions reduction litigation against firms is illegitimate. Two reasons for this lack of legitimacy stand out: such injunctions are based on a fundamental misunderstanding of the functions of tort law and its duty of care, and in a democracy, only politicians and the government agencies that are under their political control have the legitimacy to create ex ante applicable behavioral rules without the consent (e.g. through contract) of those to whom they would be applicable.

A reductio ad absurdum

Traffic accidents kill about 1.2million people every year. Clearly, car traffic is a direct attack on the right to life and health.  Would this mean that courts should be able to limit the use of private cars, e.g. to use for professional reasons, based on a duty of care fleshed out by the right to life? NGOs representing past victims’ families could argue that precautionary injunctions are better than waiting to compensate after deaths have occurred. 

Yet this would be an absurd application of tort law principles or human rights law.  The duty of care from tort law is a measuring instrument to determine whether someone who caused damage behaved with due care or not. It is emphatically not an ex ante enforceable duty to behave with due care. Courts can correctly rule that a car driver who stuck to all statutory traffic rules nevertheless drove without due care and is therefore liable to compensate victims for the caused damage. But courts cannot create precautionary traffic regulation. Creating such regulation requires the weighing of incompatible interests - e.g. mobility versus safety - and at least 2500 years’ worth of attempts have shown that this cannot be done in a rational way: it is therefore a core political decision, creating a compromise solution and therefore winners and losers. Therefore, in a democracy, only politicians can weigh these competing interests to produce regulation.  Also, courts, operating in adversarial procedures, are ill-suited to make trade-offs between competing interests (e.g. affordable energy versus emissions reductions), since each party to the procedure single-mindedly pursues only one of those interests. Societies have, in effect, accepted millions of deaths and injuries annually as the price of the conveniences of car traffic. Judges are not allowed to overrule such societal, political decisions.

But when the Court of Appeal in The Hague ruled that Shell is in principle subject to a duty to combat dangerous climate change derived from the “social standard of care” from tort law, it was exactly doing for climate regulation what everybody agrees it should not be allowed to do for car traffic regulation. Even though the court also ruled, correctly, that it cannot determine the specific CO2 emissions reduction rate that should be imposed on Shell, by finding in principle an emissions reduction duty, it effectively created a new subjective right for plaintiffs (all the inhabitants of the Netherlands).  When one private person (an NGO) demands an injunction against another private person (a firm), it demands the court order the defendant to behave in a certain way. In western legal systems, one private person can only demand another citizen or firm behave in a certain way based either on a subjective right or when the plaintiff has received standing to enforce pre-existing black letter behavioral regulation. Tort law does not contain such an ex ante duty to behave with due care, e.g. to limit one’s CO2 emissions.

Human rights and tort law 

To be sure, the European court of Human Rights in Klimaseniorinnen ruled that every European citizen has a right to protection against dangerous climate change. But this is a right against the state, not private firms.  Such “vertical” rights only affect horizontal relations between private actors through existing private law rules, such as tort law, which as mentioned does not contain a duty to behave with due care. Also, German courts in the car manufacturers’ cases rightly stressed that when governments, bound by a human rights duty to protect citizens against climate change, nevertheless enjoy wide discretion in developing specific climate policies, firms must have at least the same discretion in developing their climate policies.

My conclusion is that NGOs that want to enlist the courts’ help in the fight against climate change in a legitimate way, should  concentrate on suing governments to force those governments to create the regulation that should be enforced against firms in order to make sure that the government fulfills its international law (e.g. the Paris Agreement) or constitutional duties (protecting citizens against dangerous climate change). Asking courts to directly create the rules you would like to see but cannot obtain through the political process, is not acceptable.

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Hans De Wulf is a Professor of Corporate Law and VBO Chair in Business Compliance at Ghent University, Financial Law Institute. 

This blog is based on a discussion which took place at The Corporation in Society: Corporate Law and Criminal Law Perspectives Workshop. Visit the event page to explore more conference-related blogs.

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