Eva-Maria Braje Managing Associate
Is civil litigation a proper tool to stop climate change?
The case of Saul Luciano Lliuya vs RWE - an example of a pending climate litigation case in Germany
In Saul Luciano Lliuya vs RWE, a Peruvian farmer and mountain guide (the Claimant), based in the city of Huarez, (supported and funded by the NGO Germanwatch) brought a civil action against RWE (the Defendant), one of Germany’s largest energy producers, demanding they be held liable for climate damages from emissions and pay towards the expenses for appropriate safety measures to protect his property.
The Claimant is the co-owner of a residence in the city of Huarez in the Ancash region of Peru, located at the foothills of the Andes in the vicinity of the Palcaraju Glacier and Lake Palcacocha at an altitude of 4,562 m, in Huascaran National Park.
Water from the overlying melting glacier and precipitation accumulate in the lake and can only partially drain naturally. Over the last 80 years the lake’s water volume has increased from 12 million m³ to 17 million m³. After severe flooding due to an earthquake and a consequent avalanche barrelling down into the lake, artificial drains and dams were built to mitigate the flood risk. The Claimant argued that he is entitled to claim costs of €17,000 towards the building of the dam to protect up to 50,000 people at risk.
The merits of the case are based on section 1004 of the German Civil Law Code that even a party who acts lawfully must be liable for damage to property caused by them.
Claim for removal and injunction
(1) If the ownership is interfered with by means other than removal or retention of possession, the owner may require the disturber to remove the interference. If further interferences are to be feared, the owner may seek a prohibitory injunction.
(2) The claim is excluded if the owner is obliged to tolerate the interference.
The starting point of the chain of causation was the role of the Defendant’s operations as an active contributory cause of damage to the environment and the flood risk, rather than any omission to act by the Defendant. The Defendant argued that there was no legal basis for liability for general, ubiquitous environmental pollution.
This case is unique for a number of reasons:
- It is the first case of its kind where an individual is suing a private company in a German civil court.
- The Defendant had no coal power plants on the ground in Peru or the rest of South America, so the alleged causation between the actions of the Defendant and the effects for the Claimant is truly global.
- The Defendant’s actions are in no way tortious or illegal (this is also not alleged by the Claimant in any way).
- The Claimant is not asking RWE for damages or the court to issue an order to stop or restrict their activities, but for their pro rata contribution for preventative measures to protect his property.
The Court of First Instance rejected the claim stating that it was inadmissible, not plausible and therefore unfounded. There was no legally relevant causation between the actions of the Defendant and the potential flood risk of Lake Palcacocha.
The Claimant lodged an appeal against the judgement in the Regional Supreme Court of Hamm, which is in charge of one of the largest court districts in the country. The Court of Hamm considered, somewhat surprisingly for the legal community, that the claim was plausible and entered in to the stage of evidence.
On 30 November 2017, the Court of Hamm handed down a so-called Indicative Order and Order for the Hearing of Evidence stating that it found the claim to be plausible. This meant that if the facts alleged by the Claimant could be proven, the claim would be successful.
The Court of Hamm ordered that expert evidence be obtained for the allegations of the Claimant:
1) A flood or mudslide resulting from the significant expansion and increase in the volume of water in lake Palacocha poses a serious threat to the Claimant’s property.
2) CO2 emissions released by the RWE`s power plants rise into the atmosphere and lead to a higher concentration of greenhouse gases (GHG) throughout the Earth’s atmosphere.
- The result of the increased concentration of GHG molecules is a reduction in the global emission of thermal radiation and an increase in global temperature.
- The increase in average local temperatures accelerates the melting of the Palcaraju Glacier and as the glacier loses mass and recedes, the volume of water in the neighbouring lake rises to a level that can no longer be contained by the natural moraine.
- The Defendant’s share in this contributory causation, is measurable and calculable and accounts for 0.47% of the total (of the GHG emissions, the rise of global and local temperature, and the rise in the water level of Lake Palacocha).
- If on further assessment of the Defendant’s share in the contributory causation, a different percentage is identified, the expert shall quantify the correct percentage.
The parties were originally invited to suggest experts, but due to concerns from both parties and related cost implications, the Court appointed an expert of its own choice to take evidence of the flood risk and prepare a flood model (which can take considerable time).
Unlike in the UK, in Germany, the Court appoints relevant expert(s) and only a court -appointed expert will prepare the report and testify, if required by the parties or the Court, during a hearing on challenges to the report.
In February 2020 the Court of Hamm announced its intention to proceed with the Order to take evidence on the ground in Peru by the appointed expert. The Court of Hamm also considered participating in an on-site meeting with the expert.
The matter was then put on hold again when the pandemic hit and only recently the Court decided to proceed with planning an on-site meeting with the expert in Peru.
It may still take a good few months until the evidence stage of the procedure will be completed. No matter what the outcome, one crucial part has already been laid down in the Evidence and Indicative Order, namely the merits of the claim in general, if the alleged facts can be proven.
Germany in general is a very convenient jurisdiction for claimants in terms of costs and cost risk. Even if a claim is not successful, the legal fees of the opponent party are capped by a mandatory cost regime and are relatively low. Provision of security for the costs of defending proceedings (required for overseas claimants) is also capped.
A further climate claim has recently been lodged by the directors of Greenpeace EV as private claimants against Volkswagen AG in the German Civil Court, along with the application for an order to significantly reduce the sale of vehicles with combustion engines and to take appropriate measures to reduce the CO2 emissions drastically by 65% (as compared to 2018) by 2030.
If Regional Supreme Courts hand down contradicting judgements, the Federal Supreme Court would review them to determine a unified course of action amongst the decisions of the different court districts.
The relatively cost-convenient legal system in Germany may be an attractive prospect for claimants. However, the German Courts are not ones for embracing forum shopping. Leading sources in German legal publications suggest that litigation and the private law of ownership were not designed to combat global climate change. However, as long as the Courts entertain such claims, as they appear to have started to do, potential claimants will increasingly pursue their quest.
The question however remains to be seen, as to whether such risks can be insured against, mainly in terms of litigation costs, but also the costs of the actual claims, including potential economic losses.
Related news & insights
News / Climate change litigation update: Derivative claim dismissed
06-07-2022 / Energy & Infrastructure
McGaughey & Anor v Universities Superannuation Scheme Ltd & Anor  EWHC 1233 (Ch) On 24 May 2022, the High Court refused a claim brought against the directors of the Universities Superannuation Scheme (the “USS”), the largest private pension scheme in the UK, for inaction around climate change commitments.
News / Refund guarantees – avoiding drafting pitfalls
12-05-2022 / Energy & Infrastructure
Refund guarantees are often described as the cornerstones to shipbuilding projects and the buyer’s main security. Although they do not strictly form part of the shipbuilding contract, a shipbuilding project is unlikely to go ahead at all without one. It is therefore important to understand the different types of guarantee instruments, and the impact each has in practice on the guarantor’s obligations to pay and the buyer’s entitlement to recovery. A well-drafted guarantee provides certainty to the parties and strikes a balance between their respective entitlements and obligations.
News / You will be estopped if you cross the line
04-04-2022 / Energy & Infrastructure
Estoppel is a useful tool in litigation, which is usually used to bind one party to a statement or a promise that it has previously expressed causing another to accept or adopt it for the purpose of their legal relations. The Court’s recent ruling in Geoquip Marine Operations AG v (1) Tower Resources Cameroon SA (2) Tower Resources PLC addresses estoppel by convention and recognises the requirement for the common assumption created between the parties to be clear and unequivocal. In this article, we focus on the specifics of the Court decision.
News / Court of Appeal overturns second Unaoil bribery conviction
29-03-2022 / Energy & Infrastructure
On 24 March 2022, the Court of Appeal overturned the conviction of a second man, Paul Bond, prosecuted by the Serious Fraud Office (SFO) in relation to alleged wrongdoing by Unaoil.
News / The Court grapples with impact of Covid-19 on European rugby
08-03-2022 / Energy & Infrastructure
As we approach the second anniversary of Covid-19 being declared a pandemic by the World Health Organisation on 11 March 2020, a number of judgments are coming out of the English Courts which are providing useful guidance on how the English Courts are treating claims concerning Covid-19, especially in a force majeure context.
News / Climate change litigation: Courts decide the law, not political policies
02-03-2022 / Energy & Infrastructure
R (Finch) v Surrey County Council CA (Civ Div)  EWCA Civ 187 “The task of the court in a claim such as this is only to decide the issues of law. Those issues cannot extend into the realm of political judgment – which is the responsibility of the executive, not the courts …”