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In the face of the government’s inaction on the climate emergency, activists are turning to ‘world first’ lawsuits in an attempt to bring about change. By Kieran Pender.

Suing for climate action

Mark McVeigh is suing his super fund for failing to consider the climate risks of its investments.
Credit: Mark Doyle

For Katta O’Donnell, the spark was a lecture; for Mark McVeigh, it was researching his superannuation fund. For both, an urgent desire for climate action has seen them become plaintiffs in the latest wave of climate litigation to reach Australia’s courts. And if they win their respective cases, the ramifications could be seismic.

“I’m suing the government because I think they need to start telling the truth about the financial risks of climate change,” says O’Donnell, a law student at La Trobe University. Last week, her lawyer, David Barnden, filed proceedings in the Federal Court in what he describes as a “world first” case.

O’Donnell was inspired to take action after Barnden gave a guest lecture to her class at La Trobe. “It is really disappointing that young people all around the world are having to beg governments to protect our future,” she says. The 23-year-old is arguing that the federal government, in issuing sovereign bonds, failed to disclose material risks to investors. “The claim says that climate change is a material risk,” explains Barnden.

McVeigh, meanwhile, has been locked in a battle with his super fund, Retail Employees Superannuation Trust (REST), since 2017. “I was digging around on the internet and came across a tool to search super funds in relation to their response to climate change,” he says. “It showed no information for mine, so I emailed them.”

He ultimately commenced proceedings against REST in the Federal Court, and is also represented by Barnden, who was, until 2019, a principal lawyer at Environmental Justice Australia.

“Mark is suing his $50 billion super fund, alleging that they did not act in his best interests by failing to think about climate risks when investing his money,” says Barnden. The case will be heard over three days in November and McVeigh is optimistic. “If we win, every fund in Australia – and even companies overseas – will be looking at this case and seeing that their duties extend to the risks posed by climate change,” he says.

The two cases could have huge consequences, both legal and practical. “There are a lot of eyes watching to see how they unfold,” says Professor Jacqueline Peel, a climate law expert at the University of Melbourne. “If they succeed, we might see copycat cases in other jurisdictions.”

As the claims are so unusual, it is impossible to predict how the Federal Court might rule. “It is extremely difficult to judge the prospects of success because these are test cases,” Peel says. “They are completely novel, not just in Australia but internationally.”

 

Australia has a long history of environmental litigation, beginning with administrative law challenges to environmentally damaging planning approvals in the 1980s. Against this backdrop, climate change claims were an obvious next step.

“One of the main ways in which Australia contributes to climate change is through the extraction of fossil fuels,” explains Elaine Johnson, principal solicitor at the Environmental Defenders Office (EDO) in Sydney. On the basis of carbon content, Australia is the world’s fifth-biggest fossil fuel extractor. “So that has been where a lot of climate litigation has focused,” Johnson says.

The first Australian decision to directly consider the impact of climate change came in 1994, with Greenpeace challenging the construction of a coal-fired power station in New South Wales. Citing the United Nations Framework Convention on Climate Change, Land and Environment Court (LEC) chief judge Mahla Pearlman, AO, ordered the developer to mitigate the station’s emissions. The EDO acted for Greenpeace. “Since then we have regularly brought climate issues to the courts,” says Johnson.

Planning cases remain the mainstay of climate litigation – just last year, the LEC blocked the development of a coalmine on climate change grounds, in what Johnson, who ran the case, described as “a turning point”. But in the past decade, climate lawyers have begun to change tack.

“Lawyers are becoming more innovative and trying out new causes of action,” says Isabelle Reinecke, executive director of the Grata Fund, which supports public interest litigation. Several factors have prompted this shift – according to Reinecke, governments are now adept at bypassing decisions they dislike, while corporate stakeholders have become aggressive in the courtroom.

There is also a more fundamental reason. “So far, the cases that have been brought, particularly the planning challenges to coalmines, have not made a significant dent in Australia’s total emissions,” says Peel. “Australia is still eagerly approving new coalmines. In that sense, there has not yet been a landmark, breakthrough case.”

This creative lawyering has taken a number of forms. Some claims have targeted governments for their failures to act. In April, the EDO launched a claim against the NSW Environment Protection Authority, on behalf of a group of bushfire survivors, arguing the EPA had breached its statutory duties by not having a climate change policy.

In other countries, human rights law has been a popular forum for pursuing climate claims. But, says Peel, “human-rights-based claims have a harder time taking off in Australia because we lack robust human rights protections, at a federal or constitutional level”.

Several states and territories do have their own human rights laws, though, and in May the EDO’s Queensland office sued Clive Palmer’s Waratah Coal on behalf of Youth Verdict. They are arguing that the development of the Galilee Basin coal project would breach Queensland’s Human Rights Act 2019.

Another approach, evident in the claims of O’Donnell and McVeigh, has been to conceptualise climate risk in financial terms, arguing that companies and their boards need to take greater action. This view was given a major boost in 2016, when the Sydney-based Centre for Policy Development issued a legal opinion by barristers Noel Hutley, SC, and Sebastian Hartford-Davis. The pair found that, as a matter of corporate law, directors could and should be considering climate risk.

Australian companies are starting to take notice. “The various legal opinions and recognition from corporate regulators that climate change risk is potentially a financial risk – and therefore should be addressed in the same way as other material financial risks – is making directors sit up,” says Ilona Millar, head of law firm Baker McKenzie’s global climate change practice, who advises many Australian boards on these emerging obligations. “Climate risk is a real risk, it is a material risk, but it is also an opportunity for companies as they transition to a low-carbon economy,” she says.

Perhaps the holy grail for Australian climate lawyers is replicating the landmark December 2019 judgement in Netherlands v Urgenda, where the Dutch Supreme Court ordered the Dutch government to significantly reduce carbon emissions after the Urgenda Foundation, a climate activist group, sued the state. The decision was reached on the basis of negligence law: the Dutch government, the court held, was breaching the duty of care it owed its citizens.

Australian negligence law is not too dissimilar. “I believe there is a chance of success here on Urgenda grounds,” says Tim Baxter, a senior researcher at the Climate Council. “The impact of that case has been remarkable. The Dutch government is actively looking into which of its coal-fired power stations to shut down as a result.

“The benefit of this next wave of climate litigation is that, while none of them alone is guaranteed to succeed, there are about 50 different legal approaches,” says Baxter. “If you roll the dice often enough, one could lead to the shift we need.”

 

In 2014, Dutch lawyer Roger Cox gave a speech after he had commenced proceedings on behalf of the Urgenda Foundation. “Judicial intervention is now our only hope of averting dangerous climate change,” he said, words that energised many of the climate litigators spoken to by The Saturday Paper.

“Litigation is critically important,” says Dr Chris McGrath, a Brisbane barrister who has appeared in the Adani litigation. “It does not replace comprehensive action from the government, but in the absence of government action, it is a critical tool.”

Many obstacles stand in the way of these besuited climate warriors. One is money: environmental groups and individuals lack the financial resources to go toe to toe with governments and corporations in the courtroom. While many lawyers and barristers give their time pro bono, the risk of an adverse costs order against an unsuccessful litigant is considerable. “The extent of the costs barrier is unique in Australia,” says Reinecke. “You don’t see it anywhere else in the world.”

McGrath says the potential involvement of third-party funders could be a tipping point. “The breakthrough will come when individual emitters are held liable for the damage,” he explains. “Litigation funders will then be able to see climate litigation as an attractive option for making money. Once that occurs, the number of cases will grow exponentially.”

McGrath points to the civil rights litigation in the United States in the 1960s, and to tobacco and asbestos cases in Australia, as inspiration for modern climate lawyers. “There is a world of possibilities,” he says. “There are so many ways in which people are being damaged by climate change. As lawyers our job is to find ways to bring those causing that damage to account. Eventually we will succeed.”

Climate litigation may not be a panacea. “Litigation can only ever be a tool, not the tool, for trying to advance climate policy,” says Peel. But across the globe, the latest wave of climate lawsuits is causing real change. Australia is not far behind. “Some of the cases currently under way, including McVeigh and O’Donnell, these could have a transformative impact,” the professor concludes. “We are potentially on the cusp of something big.”

This article was first published in the print edition of The Saturday Paper on Aug 1, 2020 as "Turning up the heat".

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Kieran Pender is an Australian writer and lawyer, and a visiting fellow at the Australian National University college of law.