Companies can be held liable for climate harms, rules German court

Judge dismisses lawsuit against RWE but confirms polluters may be liable for climate-related harms. 

The judge overseeing a climate lawsuit against RWE in Germany has stated that big emitters can, in principle, be held liable for contributing to climate-related harms.  

After a decade of legal wrangling, the case against the German energy firm, brought by Peruvian farmer Saul Luciano Lliuya, was dismissed this week after an appeal court deemed there to be no concrete danger to Lliuya’s property.

Experts estimated the house stood a 1% chance of being flooded in the next 30 years.  

“The mere abstract danger of flooding is not sufficient to justify a claim for defense,” the judgement read. 

However, presiding judge Rolf Meyer added that an emitter may be obligated to take “preventative measures” if there is a likelihood of “adverse effects.” 

Failure to do so could result in liability, he said. 

“If the polluter definitively refuses to do so, it could be determined, even before actual costs are incurred, that the polluter must bear the costs in proportion to their share of the emissions – as the plaintiff demands.”  

Meyer’s judgement has been understood by many to pave the way for a new legal understanding that large corporate emitters can be held responsible for climate impacts. 

RWE said it was “impossible” to justify compensation from companies for such impacts, because they “cannot be traced back to certain emitters due to the large number of polluters”.

In a statement published on Wednesday, it said such a ruling would have had “unforeseeable consequences for Germany as an industrial location, because ultimately claims could be asserted against any German company for damage caused by climate change anywhere in the world”.

Judge Meyer, on the other hand, said the “great distance between the defendant’s power plants and the plaintiff’s residence in Peru alone was not sufficient reason to declare the lawsuit unfounded”.

The judgement has been compared to a 2021 case brought against Shell by Dutch non-profit 𝘔𝘪𝘭𝘪𝘦𝘶𝘥𝘦𝘧𝘦𝘯𝘴𝘪𝘦, which argued – successfully at the time – that the oil major was legally obliged to reduce emissions through its policies in order to protect citizens from the impacts of climate change. 

A Court of Appeal in The Hague reversed the ruling last year, citing a lack of consensus on how companies should reduce wider Scope 3 supply chain emissions. 

Following an appeal by Milieudefensie, the Dutch supreme court is expected to settle the case next year.   

Meanwhile, Chevron is fighting a significant case brought by Plaquemines, a parish in the US state of Louisiana. 

In April, the parish was awarded $745m over coastal damages allegedly caused by the oil major’s predecessor, Texaco. 

The region claims to have lost around half its land over the past century because of the firm’s activities and its alleged failure to follow laws dating back to 1978, which require sites used by oil companies to be “be cleared, revegetated, detoxified, and otherwise restored as near as practicable to their original condition”. 

Chevron’s attorney Mike Phillips described the ruling as “unjust” and said Chevron planned to appeal.  

The case has potentially wide ramifications as there are more than 40 similar lawsuits outstanding against oil and gas companies by coastal parishes and the State of Louisiana