583Climate justice litigation and private international law[*]

Prof. Ord. Geert Van Calster

KU Leuven, Belgium

1. Introduction

Thank you for the gracious introduction and for highlighting the importance of today’s discussion on Private International Law and Climate Litigation. I have prepared a presentation with several slides to elucidate the topics we will be exploring. I am hopeful that my screen sharing is effective, allowing you to view the content I am about to present.

Today’s seminar aims to delve into various complex aspects of climate litigation within the realm of private international law. While I am constrained by a twenty-minute timeframe, I encourage those interested in further discussion to contact me at the email address provided in this slide. The intricacies and layers of this subject are vast and today’s session will only scratch the surface.

A primary focus of our discussion will be on the nature of strategic and public interest litigation related to climate issues. A significant number of these cases, observed in countries like the Netherlands, Belgium, Australia, and the United States, often involve claimants –ranging from the youth to older individuals– challenging states and corporations to fulfil their legal obligations in addressing climate change. The primary goal of these litigations is to prompt action from both states and corporations to protect the public interest in climate change mitigation. Such cases are expected to persist.

However, it is important to note the growing trend of straightforward claims seeking compensation for damages attributed to climate change. These include the increasing instances of floods, wildfires, and other climate-related disasters. Such litigation often involves defendants like insurance companies. This aspect is crucial, as involving individuals with direct, often monetary, interests in the claim can circumvent standing issues that vary across different jurisdictions. Bringing in these individuals can be a strategic move to overcome legal barriers to court access.

There are several reasons behind the rise in climate litigation, as outlined in this slide. A key point worth emphasizing is the failure of international and state law in terms 584of delivery and speed. This inadequacy necessitates an increased reliance on the courts. While some may argue that resorting to legal action intrudes into the domain of politics, it is evident that politics alone has been insufficient in addressing these urgent issues. Thus, litigation becomes a necessary tool for achieving faster and more effective solutions.

Lastly, it is pertinent to acknowledge, though not the main subject of today’s seminar, that litigating climate issues inevitably question the prevailing economic and business models. These models emphasize outsourcing, and increased consumption and production. Some climate litigation cases might significantly influence societal perspectives and economic policies, reflecting the broader implications of these legal actions.

2. Selected issues on International Jurisdiction

The contemporary legal landscape in climate litigation is characterized by an abundance of forums, a reality that, while presenting certain challenges, also offers a multitude of opportunities. This complexity is especially pertinent to practitioners and scholars in private international law and international litigation, where the strategy of forum shopping becomes a critical factor. When engaging in climate litigation, whether driven by private or public interests, a pivotal consideration is selecting a jurisdiction that offers the best prospects for a favourable outcome. This involves assessing where one might obtain the most efficient, impactful, and enforceable judgment, thus leading to a deliberate choice from a wide range of potential legal venues. This selection process is deeply intertwined with the nature of the claims encountered in environmental litigation.

In the realm of state-to-state litigation, which falls under public international law, such disputes are infrequent but significant when they occur. An illustrative example is Vanuatu’s recent request to the International Court of Justice, seeking an advisory opinion on state obligations under public international law concerning climate change. Although not the primary focus of this discussion, these cases highlight the interplay between international legal obligations and climate-related disputes.

Another category, though rare, involves claims rooted in the direct application of international environmental law. This area is complicated by the monism/dualism dichotomy, where states differ in their approach to integrating public international law into their national legal systems. Monist states incorporate these laws directly upon ratification, whereas dualist states, such as Australia and the United Kingdom, treat public international law as a distinct legal order, complicating its application in domestic courts. This distinction influences the choice of forum, as it affects the applicability and enforceability of international environmental norms within different legal systems.

In private international law, “duty of care” cases are increasingly associated with climate litigation. These involve arguments that a private corporation or, less commonly, a government, has failed to its environmental responsibilities, impacting citizens 585and employees. The choice of forum in these cases is often influenced by how different legal systems interpret and enforce corporate duties regarding climate policies.

Investor suits, focusing on the financial implications of corporate actions on climate change, are also gaining prominence. In general, and as already noted, a frequent criticism of climate litigants is that their actions are attempts to entangle the courts in political matters, a claim often directed at duty of care cases as well. Litigating against a corporation, particularly those with headquarters in countries like the Netherlands, over their alleged failure adequately to address global climate change, can be perceived as leading to a judgment with political undertones. However, the unique appeal of investor suits lies in their primary focus on financial outcomes. These lawsuits often circumvent accusations of political motivation by framing the issue simply around monetary losses. In these suits, typically presented in a class action format, investors claim that a corporation, or its individual directors, have neglected to consider the implications of climate change, consequently diminishing the value of shareholder investments. A case exemplifying this trend is the claim involving Client Earth, a minority shareholder in Shell. This legal action targets the corporation itself rather than its directors. The suit faced standing challenges in the High Court (related to the nature of shareholders’ “derivative” action), and permission to appeal was denied by the Court of Appeal. Yet cases like these will be repeated and mark a significant turn in the evolution of climate litigation. Jurisdictions like California and Australia are also becoming important to observe in this context. California’s significance stems from both the immediate impact of such lawsuits and the influential role of the state’s insurance commissioner in these matters. Meanwhile, Australia is witnessing a rise in investor lawsuits against corporations in the raw materials and mining sectors.

I wish to elaborate a little bit on the critical aspects of jurisdiction and enforcement in the context of climate litigation. As previously mentioned, the phenomenon of forum shopping is an important consideration. In typical private international law cases, which often involve individuals or groups suing other individuals or corporations, there is a wide array of potential forums to choose from. It is evident that currently, some jurisdictions are more attractive for pursuing climate change cases than others, due to their innovative and creative legal approaches. The Netherlands, for example, stands out as a particularly favourable jurisdiction in this respect. Likewise, certain courts in the United Kingdom may offer interesting prospects for such cases. Additionally, other jurisdictions, including some within Australia, are emerging as significant venues for climate litigation. The choice of a jurisdiction for litigating against a corporation on climate issues is a decision laden with implications. It is essential to be aware that some jurisdictions might be more conducive to such litigation than others. An important factor in this decision-making process is the attitude of the judiciary towards such cases. Litigants generally seek to avoid 586jurisdictions where judges might hesitate to rule on a climate-related claim due to concerns about being perceived as politicizing the issue. This consideration is crucial as it affects the likelihood of a claim being heard and adjudicated effectively. The way judges in different jurisdictions have previously expressed themselves on the intersection of climate litigation and politics provides valuable insights into the suitability of those forums for future climate-related cases. I will discuss enforcement a little more in the next heading.

The issue of financing in climate litigation is another significant area that requires careful consideration. The attractiveness of jurisdictions in terms of financial support can vary greatly. This factor becomes particularly relevant when distinguishing between actual monetary claims and public interest claims. Public interest claims are commonly funded through crowdfunding, a method well-suited to these types of cases due to their broader societal implications and the collective interest they often represent. In contrast, class actions concerning climate issues typically necessitate a different approach to financing. These cases often require more substantial financial backing, which might not be readily available through crowdfunding methods. Consequently, litigants must seek jurisdictions that are supportive of alternative financing mechanisms. These include third-party litigation funding and no-win-no-fee arrangements, which provide the necessary financial resources to pursue these claims effectively. There has been considerable development in this area of litigation financing, particularly in the context of climate-related cases. Alongside these developments, there is a growing call for regulatory action by the European Union. These calls focus on the need for clear and supportive regulations governing the funding of climate litigation, recognizing the unique challenges and significant costs associated with pursuing these complex and often resource-intensive cases. The evolving landscape of financing options and the potential for new regulations in this area are crucial factors for litigants to consider when planning their legal strategies in climate litigation.

Finally, the consideration of cost orders is a critical element in the context of forum shopping for climate litigation. When embarking on a legal battle against a corporation, particularly one that may extend over several years, the financial implications of the outcome must be carefully weighed. A significant risk in such litigation is the possibility of the corporation emerging victorious. In such a scenario, the corporation may have the legal right to recover its costs from the claimant. This potential financial burden is a crucial factor for claimants to contemplate prior to initiating litigation. The risk of being held responsible for the corporation’s legal expenses, especially after a protracted legal struggle, can be a substantial deterrent. It is a factor that can influence the decision to sue, the choice of jurisdiction, and the overall strategy of the litigation. Understanding the implications of cost orders and assessing the likelihood of their enforcement in different jurisdictions is essential for claimants. This understanding helps in making informed decisions about whether to 587pursue legal action and in which jurisdiction to do so. The potential for facing significant financial liabilities in the event of an unfavourable outcome is a key consideration that shapes the landscape of climate litigation and affects the strategies employed by those seeking to hold corporations accountable for their impact on the climate.

3. Selected issues on Recognition and Enforcement

Shifting the focus to the aspects of recognition and enforcement in climate litigation, it is essential to acknowledge a fundamental truth: companies can significantly obstruct enforcement efforts, a scenario all too common in environmental law. Prominent examples include the Chevron and Texaco case in Ecuador, where prolonged legal battles exemplify this obstruction. This issue is particularly relevant to public law lawyers who grapple with the outcomes of climate litigation. A key question arises when a climate claim leads to a judge imposing a positive obligation on the defendant, rather than a monetary judgment. Such non-pecuniary judgments, which might require the defendant to develop an appropriate climate policy, present considerable enforcement challenges. Enforcing these obligations is inherently difficult within the jurisdiction where the judgment is obtained, and it becomes even more complex in foreign jurisdictions. This complexity has prompted public law lawyers to explore strategies for advancing to the next stage of enforcement in cases that result in non-pecuniary judgments. Notable instances include the Klimaatzaak case in Belgium and the Urgenda case in the Netherlands. In these cases, despite obtaining favourable judgments initially, the challenge lies in the defendants’ implementation of these judgments. These situations underscore the difficulties in ensuring compliance with court-ordered environmental obligations, particularly when they extend beyond monetary compensation and involve substantial policy changes or other non-financial remedies. The exploration of effective enforcement mechanisms in such cases is a critical area of ongoing legal development and debate.

In this segment, I aim to delineate the nuanced differences between public international law and private international law. This distinction is not always clear-cut and varies significantly across different jurisdictions. A prime example of this complexity can be observed in the Netherlands, known for its strong monist approach towards public international law. In such jurisdictions, public international law can play a significant role even in private claims. This interplay was notably evident in the Shell judgment, where the Paris Agreement was a prominent factor despite the case being a private claim in a private legal context. Additionally, the evolving role of multinational corporations as subjects of public international law is a noteworthy development. There are several references to key judgments in both Canadian and US legal systems that shed light on this emerging area. These cases highlight the increasing relevance of multinational corporations within the ambit of public international law, a topic that is still developing and warrants close attention. This evolving 588jurisprudence reflects the growing intersection between international public obligations and private legal actions, particularly in the context of global environmental issues and corporate responsibilities. As such, this area represents a dynamic and significant field of legal inquiry and development.

The role of Investor-State Dispute Settlement (ISDS) mechanisms in climate litigation is a pivotal aspect that demands careful consideration. Equally important is the concept known as the “fork in the road” mechanism. This mechanism entails a choice for investors between pursuing a case through an investment tribunal, as provided under international investment agreements, or seeking recourse through ordinary courts against the state involved. Once this choice is made, the investor is typically required to adhere to the selected path for the entirety of the legal process. Investors, recognizing the critical nature of this decision, must meticulously evaluate their options to determine where they stand the best chance of achieving a favourable outcome. This evaluation is particularly crucial when claims involve allegations that a state’s climate policy is adversely affecting their investments. A prominent example highlighting the complexities associated with ISDS is the Energy Charter Treaty. This treaty has been a subject of considerable debate and controversy, especially regarding its provisions on the treatment of subsidies for renewable energy development. The problematic aspects of the Energy Charter Treaty, such as its impact on the promotion and regulation of renewable energy, have raised significant concerns among stakeholders in the field of climate litigation. As such, the intersection of ISDS mechanisms, including the “fork in the road” provision, with climate policy and investment in renewable energy resources, remains a critical area of legal and environmental discourse.

The concept of forum shopping, previously mentioned, highlights the multiplicity of legal forums available for climate litigation, which is not inherently negative. This principle also applies to the choice of applicable law, a topic we will delve into later with a focus on the Rome II Regulation in the European Union. For a claimant seeking to leverage a particular law or court that seems advantageous for their case, the first requirement is that the case possesses an international dimension. This international element can be introduced by involving claimants from different jurisdictions or by incorporating various geographical areas into the litigation. A prime example of this approach is the Milieudefensie and Shell case, which stands out as a crucial and relatively unique instance where private international law and climate litigation intersect, specifically concerning applicable law. In this case, the Dutch Court accepted the application of the Rome II Regulation, the European regulation that governs applicable law for non-contractual obligations, including torts. This acceptance was particularly notable given the context of the lawsuit: a Dutch NGO representing Dutch citizens sued Shell, a corporation headquartered in the Netherlands at the time. The global nature of the emissions in question appeared to be a sufficient factor for the court to apply the Rome II Regulation, without requiring many 589specific considerations. This case exemplifies the strategic use of private international law in climate litigation, especially in terms of selecting applicable law. The acceptance of the Rome II Regulation by the Dutch Court in the Milieudefensie and Shell case illustrates the evolving landscape of legal strategies in addressing global environmental issues, highlighting the importance of considering both the choice of forum and applicable law in international climate litigation.

In the context of civil jurisdiction within the European Union, a significant aspect is the application of a forum non conveniens-like doctrine as outlined in the Brussels Ia Regulation. This regulation includes a mechanism that allows a defendant, when sued in an EU court, to challenge the jurisdiction of that court if a similar case is already pending in a third-country jurisdiction. This aspect is noteworthy because it could potentially be utilized by sophisticated corporate defendants, particularly those less concerned about their reputation, strategically to initiate “denial of liability” or “negative declaration” proceedings in a court outside the EU. This tactic could effectively preempt and counteract subsequent claims brought against them within the EU. For instance, consider a scenario where an NGO intends to sue a corporation, let’s say “Corporate Bastards NV” of Belgium, over a climate-related issue. In anticipation, “Corporate Bastards NV” might proactively file a case in a non-EU court, seeking a declaration of non-liability for the alleged environmental or climate damage. This preemptive action outside the EU could serve to undermine the NGO’s subsequent lawsuit within the EU. Such tactics could become increasingly prevalent, particularly in business and human rights cases. Corporate defendants are becoming more astute in navigating the legal landscape, realizing that initiating legal proceedings outside the EU can be an effective strategy to thwart or “torpedo” legal actions within the EU. This development underscores a growing trend where legal strategy extends beyond the merits of the case itself and involves careful consideration of jurisdictional tactics.

The final issue I wish to address pertains to Strategic Lawsuits Against Public Participation (SLAPPs), which have become increasingly relevant, particularly in the context of environmental activism. SLAPPs are essentially legal actions initiated by corporate defendants against activists, often with the primary intention of silencing or intimidating them. These lawsuits can be based on claims of liability or other legal grounds. They have emerged as a highly effective tool for corporate entities to discourage and deter public participation and critique, both within the European Union and more extensively outside of it.

One particularly potent aspect of SLAPPs in common law jurisdictions is the Anton Pillar order. This legal procedure allows corporations to conduct searches of the homes and properties of claimants. Such orders are highly intrusive and represent a significant escalation in the aggressiveness of legal strategies employed by corporations against activists. The invasive nature of these orders and their potential to intimidate should be a matter of grave concern for anyone engaged in public 590activism or litigation against corporate entities. It is noteworthy that the European Union is actively seeking to address the issue of SLAPPs. There are proposals currently under consideration aimed at mitigating the impact of these strategic lawsuits, which are often used to stifle public participation and dissent. The evolution of these proposals and their potential implementation represent a crucial development in the legal landscape, particularly for those involved in environmental activism and facing the threat of such legal intimidation tactics. The recognition and regulation of SLAPPs by the European Union signify an important step towards protecting public participation and the right to engage in environmental advocacy without the fear of retaliatory legal actions.

4. Selected issues on the Law Applicable

Focusing on the aspect of applicable law in the realm of European private international law, Article 7 of the Rome II Regulation stands out as particularly significant. This article is notably value-driven, a rarity in the context of European private international law, and is designed to enhance environmental protection. It grants the flexibility to choose either the law of the place where the environmental damage occurred or the law of the place where the event causing the damage occurred, and then apply this chosen law to the entirety of the case. However, the definition of what constitutes “environmental damage” raises certain questions, though it is likely that most climate-related damages would fall under this category. The application of this principle will be revisited in the context of the Shell case. It is important to note that the focus should not be exclusively on Rome II, as there are numerous climate-related cases where Rome I could also be relevant, particularly in issues related to insurance. Furthermore, within Rome II, one should not be narrowly focused on Article 7. There could be a more suitable legal avenue for a claimant hidden under a different qualification. For instance, the areas of unjust enrichment or unfair competition present promising and interesting categories for climate change litigation, which I intend to explore further in future writings. A practical approach in these cases is what could be termed ”reverse engineering”. This involves initially selecting the law that appears most advantageous for the claim and then strategically framing the claim to align with that chosen legal provision. Sophisticated claimants, adept in navigating the intricacies of private international law, understand how to employ this tactic effectively. This strategic selection of applicable law, particularly under the diverse provisions of the Rome II Regulation, illustrates the complexity and dynamism of legal strategies in climate litigation.

Delving into Article 7 of the Rome II Regulation, several key issues emerge. The first is the challenge of defining “environmental damage” –specifically, when does damage qualify as environmental? This question has been a subject of legal debate, as evidenced in cases before the Court of Appeal in England. Another significant aspect under this article is the corporate duty of care. There were initial suggestions that this duty might be excluded from the scope of Rome II due to the corporate law 591exception within the regulation. However, this is likely not the case, as indicated by a judgment from the Court of Justice in the ZK v BMA case, which suggests that the general corporate duty of care is indeed encompassed within Rome II. This issue contrasts with the liability of directors, as seen in the Client Earth and Shell case, which engages the carve-out of Article 1(2)(d) of Rome II.

An intriguing aspect of Article 7 is the determination of the locus delicti commissi, the place where the event causing the damage occurred. In cases involving a central parent corporate organisation with multiple subsidiaries, there are strong arguments to suggest that the locus delicti commissi should be considered the headquarters of the parent corporation itself, as this is where decisions affecting global or local climate policies are made. A relevant case for reference is the Arica-victims case in the Swedish courts, which deals with environmental pollution and links to various judgments in Sweden. In the Milieudefensie and Shell case, Article 7 of Rome II was applied, at least initially, leading to the conclusion that the locus delicti commissi was in the Netherlands. This finding is currently under appeal by Shell, making it a significant aspect of the case and one to watch closely. The outcome of this appeal in the Dutch Court of Appeal will be instrumental in further clarifying the application of Article 7 in the context of climate litigation and the determination of the locus delicti commissi in cases involving multinational corporations.

The impact of Article 17 within the context of European private international law also warrants attention. This article posits that local rules of safety and conduct should invariably be taken into account. This provision brings into question the role of environmental permits within various countries and also raises concerns about the application of foreign public law by courts in different jurisdictions. A significant issue for discussion is the extent to which environmental law, even when it falls under European law, may be considered foreign public law and, as such, might not be applicable in a court of another jurisdiction. This topic opens up intriguing avenues for legal debate and analysis.

5. Concluding remarks

As I approach the penultimate slide of my presentation, I aim to wrap up with a focus on a developing EU corporate sustainable development due diligence, CSDDD or CS3D Directive. This directive, which has experienced delays due to corporate lobbying, initially sought to make comprehensive amendments to Brussels IA, and also to Rome I and Rome II, as per the perspective of the European Parliament. However, it now appears that such extensive amendments are unlikely. The current proposals introduce a limited private international law component, suggesting that member states should mandatorily implement corporate due diligence requirements in supply chains as overriding mandatory law. The details of these proposals are still being refined and have not reached a final form, but they represent a significant area to monitor. This evolving legislative landscape reflects the complexities and challenges in harmonizing private international law, especially in the 592context of corporate responsibilities and environmental considerations. As this legislative process continues to unfold, it is an area that demands close observation for its potential implications on private international law and climate litigation.

In conclusion, the realm of private international law, while presenting numerous challenges, also offers a wealth of opportunities. This final slide, though highlighting the challenges, underscores the potential advantages that private international law provides in the context of climate litigation. The strategic selection of forums (forum shopping) and the careful choice of applicable law are crucial aspects that can significantly influence the outcome of legal claims. These elements of private international law open up various avenues for effective litigation, allowing for nuanced and tailored approaches to each case.

I hope the insights shared have been informative and thought-provoking. I am eager to address any questions or further discussions that may arise from this seminar. Thank you very much for your attention and engagement in this complex and evolving field of law.

[*] Transcription of oral contribution presented at the online workshop of Lex&Forum on 21.9.2023. Thanks are due to Dr. Ioannis Revolidis for converting the contribution into text.