Clyde & Co Resilience Climate Change Risk Liability Report



Climate change litigation is not new – but now we are seeing new types of claims emerge, brought by a wider range of claimants against businesses, with potential for increased D&O risk too

Petroleum as a “defective product” For years, governments have been under pressure to tighten the regulation of emissionsfrompetroleum-basedproducts, with claims being brought predominantly in the administrative courts, to compel governments and regulators to take a tougher line on climate change. In 2017, a new type of litigation emerged in the United States. Cities, counties and states have begun bringing lawsuits against the oil industry. Their approach creates significant risks to the companies concerned because the lawsuits have been commenced as simple tort claims in the state courts. If state court jurisdiction is upheld, it allows plaintiffs to launch similar actions nationwide in courts which are often perceived to be a dangerous forum for corporate defendants. The complaints focus upon an allegation that the oil industry has, for the last 50 years, sold and marketed petroleum, despite knowing about the harmful effects of burning carbon-based products. The arguments are similar to those used in tobacco and asbestos litigation, although the core allegation that petroleum is a defective product is clearly on a different scale. Such a finding has potential to disrupt the global economy.

- Neil Beresford, Partner, Clyde & Co, London

We’re starting to see lawsuits where damages are sought to compensate for future losses, and “product liability” arguments are being used.

- Neil Beresford, Partner, Clyde & Co, London

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