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Suing big oil companies for their contribution to climate change

1 June 2018
2018 has seen an onslaught of cities, states and celebrities in the United States attempting to sue big oil companies for climate change-related damages. Former governor of California, Arnold Schwarzenegger, has brought the most recent high profile litigation against big oil companies. He claims that the companies in question were “knowingly killing people all over the world” by exacerbating global warming through their levels of pollution. Another example in the US is the landlocked city of Boulder County alongside San Miguel County that are suing Exxon and Suncor to recover losses suffered due to damage caused because the companies were not upfront about their knowledge of the dangers of climate change.

These are just two examples in a multitude of litigation brought against oil and gas companies. This year in the UK we have already seen extreme weather in the form of the ‘Beast from the East’ and storm Emma. Whilst it would be unfair to blame oil and gas companies for the damage they caused, scientists have forecast that it is likely that similar extreme weather will become more common place as the global climate increases in temperature. We have seen flooding; damage to roads, railways and airports; schools closed; hospitals understaffed and thousands of people affected by power cuts. Putting a precise figure on how much these weather fronts and their subsequent disruptive influence affected the UK is very difficult, but the estimated cost to the UK economy, according to analysts who informed The Guardian, is in the billions.

So why haven’t UK cities followed the trend set across the Atlantic? In theory similar lawsuits could be brought by a UK city against an oil and gas company for exacerbating climate-change, for example under domestic laws for public nuisance.

The main reason cities haven’t brought litigation against oil and gas companies is most likely down to cost. To take a major oil and gas company to court on such issues would incur enormous cost, not simply in terms of legal fees but also because of the devastating impact on the city and its reputation if the litigation was to be unsuccessful. US law firms are able to arrange ‘no win no fee’ claims for these types of litigation whereas in the UK there isn’t the same appetite for firms to do likewise. If a UK city was to lose then they would inevitably be liable not only for their own legal costs but those incurred by the oil and gas companies as well. 

Successful litigation cannot be assumed just because of the favourable cases in the US. Causation is a major hurdle that UK cities will need to overcome. Climate change is a complex environmental matter; establishing that a city has been adversely affected by a specific oil company’s actions would be very difficult, especially as these companies cannot be blamed entirely for climate change. For every successful case in the US there have been a multitude of court cases brought by cities, groups and individuals which have been unsuccessful at trial. 

The unfortunate reality of climate change is that the general public will not demand action against oil and gas companies until they feel the adverse effects themselves. Cities in the US such as Miami, which on average sits two metres above sea level, have already spent $200m raising the height of streets and have created a series of pumps to force water off the roads to prepare for rising sea level rises and continuous flooding. The UK hasn’t so far faced the comparable effects of climate change in the form that the US has experienced.  

Analysis from the BBC has found that £1.8bn will be spent on the Thames estuary over the next century for flood defences. Given the multitude of causes of climate change, is it correct that the UK tax payer foots the bill entirely? Time will tell whether cities, action groups or individuals are willing to take on the considerable risk of litigating to try to hold oil companies responsible.

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Jonathan Tardif

Jonathan Tardif

Partner and Head of Business and Professional Risk

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