Updated: Nov 15, 2021
A recent application in the Federal Court of Australia has explored the challenging question of where responsibility for losses arising from climate change should lie?
A finding that responsibility rests with today’s generations unlocks the possibility that other groups may, in the proper circumstances, seek further confirmation from the Court that the price for climate change, if payable, should be paid today.
For insurers and insured contemplating what the world of insurance and climate change will look like for them, the Federal Court’s judgment gives that world some real definition and, they may find, be disturbing.
There is a coal mine in northern New South Wales. Its owners wanted approval to increase the amount of coal which the mine would produce from 135million tonnes to 168million tonnes. If approved the additional coal extracted would contribute, once combusted, 100Mt of CO2 towards the existing greenhouse gases in the atmosphere.
The responsibility for deciding to approve the increase fell upon the relevant Commonwealth Government Minister.
Eight Australian children claimed in the Federal Court of Australia that the Minister owed each of them a duty to exercise her powers with reasonable care so as not to cause them injury or harm arising from future climatic hazards to which they will be exposed in their adulthood.
A key question is how does a Minister in the Commonwealth Government of Australia owe such a duty to these children? What is the feature of their relationship which would sustain the existence of such a duty?
The Minister and the Children
Interference with the Natural Environment
As the Federal Court commenced to grapple with the relationship between the Minister and the Children, it observed:
‘In this case, the law is being asked to respond to altering social conditions brought about by human interference to the natural environment. The deterioration of social conditions brought about by the degradation of the habitat or the environment in which people live and on which they rely has been a constant impetus for the development of the common law. It is instructive to briefly consider the history of the development of the torts of nuisance and negligence with a focus upon the early cases which had to grapple with how the law should address the ever-increasing capacity of human beings to alter the environment to the detriment of others with whom that environment is shared. Relevantly, some of the early cases involved environmental damage done in the performance of a statutory authority or power.’
The gist is that interference with the natural environment has, for centuries, driven the Courts to allocate responsibility and, therefore liability to others. This is just another case where the Court’s assistance is being sought to allocate that responsibility and liability more widely.
A Novel Duty
Even though the context is not an unfamiliar one, there was no precedent for the proposition that the Minister, in discharging her statutory functions, owed the Children or others in a similar situation a duty or obligation to bear their interests in mind while discharging those functions.
In that sense therefore such an obligation or duty was novel. But being novel does not mean that the duty does not exist. Its existence turns upon its salient features and whether those features support, deny or say nothing about the existence of the duty.
For some years, Courts in Australia have sought to identify what constitutes a salient feature. The list is extensive and is treated more as a checklist rather than a compulsory list. In this case the prevalent salient features were: -
Coherence (coherence and consistency with relevant legislation and public law principles);
Control (the degree and nature of control able to be exercised by the Minister to avoid harm);
Vulnerability (the vulnerability of the Children); and
The Federal Court felt that ‘coherence’ was a neutral or slightly negative salient feature. But ‘control’, ‘vulnerability’ and ‘reliance’ represented overwhelmingly powerful forces in favour of a finding that such a duty existed.
Broader factors such as ‘indeterminacy’, policy considerations and reasonable foreseeability, wider neighbourhood principles and a reference to contemporary social conditions and community standards, were all consistent with the Court’s conclusion that
‘a reasonable Minister for the Environment ought to have the Children in contemplation when facilitating the emission of 100 Mt of CO2 into the Earth’s atmosphere. It follows that the applicants have established that the Minister has a duty to take reasonable care to avoid causing personal injury to the Children when deciding, under s 130 and s 133 of the EPBC Act, to approve or not approve the Extension Project.’
Through the application of established principles in a familiar context, the Court was able to find that the Minister had a duty to the Children not to cause them harm or injury in the discharge of her duties.
As the debate around climate change continues, greater consideration is being given to the obligations which parties have to others in relation to climate change. For example, what obligations do company directors have to ensure the proper management of their company’s climate footprint?
This case takes things to a new level. The principle that there is an obligation to take another’s well-being into account whenever a decision is made that has climate change ramifications, will and should make that decision a much more considered one.
The name of the case is Sharma by her litigation representative Sister Marie Brigid Arthur v Minister for the Environment  FCA 560 (27 May 2021)