In recent decades, there has been a marked increase in the number of actions brought in the UK and elsewhere based on alleged environmental and human rights-based failings by large multinational corporations.
As these claims have developed in the English courts, the typical model is for groups of foreign claimants to allege a UK-domiciled company owes them a duty of care in relation to environmental or other impacts of the acts (or omissions) of another company in another country. For example, a foreign subsidiary, or even an unrelated business partner in the company’s supply chain.
These cases, often referred to as transnational tort claims, have risen in prominence in recent years for a number of reasons. Against the background of evolving views on the importance of ESG issues, transnational tort litigation is perceived to fill a gap where local laws or procedures leave no basis for redress or where lawyers cannot act on a no win, no fee basis to enable prospective claimants. Moreover, it may be attractive from a claimant perspective to pursue parent companies or large business partners with the deepest pockets.
Such factors have led claimant law firms and litigation funders to find creative avenues for claims, while local communities are becoming increasingly mobilised to seek redress. With the impacts of climate change becoming ever greater around the world, and in light of the resultant increase in corporate policymaking, climate-related impacts may become a focus for transnational tort claims in the future. While this is a developing area, there are significant hurdles facing any attempt to hold corporations liable for causing or contributing to climate change per se. It is, however, foreseeable that claims could be brought based on activities which allegedly exacerbate the effects of climate change in a particular area or for a particular community.
This article in our series on climate disputes looks at the increasing risks for businesses of climate-related litigation arising out of the operations of their subsidiaries or companies in their supply chain, and how those risks can be mitigated.