Climate change litigation 3 takeaways for businesses from FOTE and Ors v BEIS
26 July 2022
26 July 2022
On 18 July 2022, the English High Court handed down judgment in judicial review proceedings arising from the UK's net zero strategy. In a successful challenge by various climate-focused claimants, the court ruled that the Secretary of State for Business, Energy and Industrial Strategy had failed to comply with the Climate Change Act 2008 in setting out proposals and policies to enable the UK to remain on track to achieve net zero by 2050. The Secretary of State must now reconsider his approach.
What are the key takeaways?
The claimants did not seek to challenge the substance of the UK's net zero strategy. Rather they alleged that the Secretary of State failed to consider the appropriate information when determining that his policies and proposals would allow the UK to meet one of a series of "carbon budgets", by reference to which the UK aims to achieve net zero. The claim also alleged that the Secretary of State had failed adequately to report to parliament what contributions individual policies would make to reducing emissions, as required by the Climate Change Act. Although the court rejected some of the claimants' claims, it accepted these allegations.
"Climate change is a global problem" are the opening words of the judgment. It's therefore unsurprising that the court received submissions on one of the most high profile climate judgments: Urgenda v The Netherlands. This was a Dutch case in which the Dutch government was ordered to take steps to do more to prevent climate change. In the English case, the claimants relied on Urgenda to seek to convince the court that the UK's obligations under the European Convention on Human Rights required the court to interpret the Climate Change Act in a way which was conducive to the protection of international human rights. The court rejected this argument as "too ambitious". But the use of human rights based arguments is increasing in climate litigation – with human rights law as a thread which weaves across legal systems, permitting arguments which find success in one jurisdiction to be deployed in climate litigation elsewhere.
Climate change litigation is a distinct phenomenon, encompassing a variety of forms and causes of action. In the UK, claimants have tended to pursue governments and public bodies. They have had mixed results before the courts, but have succeeded in drawing attention to a variety of climate-related issues. Which claims are most likely against companies and financial institutions? Claims for misleading investors and consumers (sometimes referred to as greenwashing), breaches of directors' and other fiduciary duties, and activist shareholder litigation are prime candidates. The FOTE judgment underlines the willingness of climate-focused claimants to use litigation to scrutinize and to hold accountable those they consider to be doing too little to fight climate change.
Author: Tom Cummins, Partner