Wednesday, September 19, 2012

Outstanding: opening the door for fairness based apportionment of liability for climate change

dividing climate change damages among tortfeasers
In his article “Apportioning Damages in a Climate Change Tort Suits”, Simon S. Grille presents a new approach to the topic indicated in the title of his article. But before we can value this contribution, we have to explain the context and present it.

In the case of multitude of tortfeasors, jurisdictions around the world apply basically two principles:

  • The principle of apportionment of damages proportionate to the individual tortfeasor's contribution (which, in some jurisdictions, is only applied when the damage is divisible);
  • The principle of joint and common liability according to which each tortfeasor is liable for the entire damage, but may refer to the other tortfeasors to get compensation.

The principle of apportionment of damages does not really help the victims of climate change. None of the Greenhouse Gases (GHG) emitting companies is in charge of more than just a few percents (we estimate the biggest polluters to range at about 2 %). Accordingly, victims of climate change, when suing the biggest individual polluters together, cannot expect to get compensation for much more than 5 % of their damage – if the simple principle of apportionment of damages is applied.

On the other hand, judges might find it unfair to put the burden for the entire indivisible damage on a polluter who contributed only to 2 % or less to the damage, even if the polluter can then run behind the other polluters to get them pay their share.

Provided you follow both points, you are in a justice dilemma: either the victims do not get a substantial compensation or you over-burden those few polluters who happen to be sued.

For this situation, the author suggests a third approach. He is in favor of applying a few more principles so as to “correct” the simple apportionment based on contribution. The GHG contribution remains of course the baseline. But secondly, if it is difficult to ascertain the GHG contribution, market shares can be used as a proxy. Thirdly, the author favors a time limit: 1992 in so far as since then states engaged jointly to fight climate change. Since 1992, polluters could not turn a blind eye on the possible causality between GHG emissions and climate change. The fourth step consists in sidelining small contributors to climate change. Below a certain threshold, one should not be liable. This result could be reached by a de minimis exception. Finally, the author would like to apply a criterion of culpability or negligence. He refers to the example where one polluter emits the same amount of GHG as the other, but in a much shorter timeframe. He also considers that big companies can more easily find the necessary resources to reduce GHG emissions, e.g. by new technologies. As to the justification of the criterion of culpability, he surprisingly states: “Support for this approach rests primarily on a theory of unjust enrichment – a defendant who was aware of the dangers of GHG emissions but chose not to take measures to address the problem has been unjustly enriched by the resulting lower costs.”

The author is of course aware of possible criticism and the limitations of his theory which should be applied as a “flexible framework”. He concludes: “The ultimate guiding principle is equity to the defendants while providing adequate compensation to a deserving plaintiff.”

We cannot foresee yet how this theory will be received in the U.S. At any rate, it might have relevance for far more jurisdictions than the one in the U.S. (which the author targets). In all the jurisdictions where joint and common liability is generally rejected or where it is not deemed as appropriate in the case of climate change (e.g. because a minimum contribution threshold has to be passed), a theory of fairness based apportionment of damages could come into play and solve the above mentioned justice dilemma.

And maybe there are more reasons why it would be worthwhile investigating this theory. Who knows, maybe the U.S. judges' insistence on questions of standing has also something to do that they feel uncomfortable with the dogmatic questions at the end of the examination chain? This would not be the only case of an avoidance strategy applied by judges.

Update: have a look at the current state of climate change compensation

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