Friday, July 24, 2009

Munich Re examines climate litigation

Munich RE office Building 
(image by Munich RE)
One of the two world market leaders in the field or re-insurance, Munich Re, published in 2010 a collection of short articles and of interviews on climate damage compensation.You can read it here on the Munich RE website (or read without Munich Re log-in on Google docs.) The authors mostly regard the classic injunction, nuisance, and compensation lawsuits as unlikely to be successful, be it for reasons of causality, legal standing, or pre-emption by U.S. Federal law. However, they point to likely other types of disputes, e.g.:
  • on the fulfillment of investment disclosure obligations (in the U.S.: Securities and Exchange Commission Reporting requirements and Regulation S-K Item 101 (c)(1)(xii));
  • shareholder litigation alleging the breach of duty of care in managing the affairs;
  • failure against professional obligation to inform and to warn;
  • misleading the public, the courts and the legislator against better knowledge (conspiracy theory, already used in the first Hurricane Katrina case Comer v. Murphy Oil USA, Inc.);
  • construction deficiencies;
  • negligence in the enforcement of environmental legislation.
These types of disputes may not only emerge in the U.S., but also in other parts of the world. One insurance lawyer fears that companies will have to deal with (unsuccessful) litigation campaigns following the example of tobacco and asbestos claims, but calls for alternative dispute settlement mechanisms and funds for parties suffering proven damage instead.

Related: Munich RE is one of many that believes liability for climate change damage is a serious issue 

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