Monday, March 3, 2014

Rather low chances for compensation of climate change damages in Denmark and Norway

Norway beach being hit by bad weather
but chances for climate change litigation low
(Image by Aconcagua)
As Sweden is amongst those countries with the best chances for victims of climate change to get compensation of their damages, we examined again and more precisely the chances of the countries in geographic proximity to it: Denmark and Norway. Both legal systems have indeed similarities with the Swedish system. However, the Danish civil law is extremely rigid. Liability under ordinary civil law is limited to cases where there is a breach of a legal obligation or deviation from common behavior. Likewise, the environmental liability is limited to enumerated cases and to the risks for which the cases were enumerated. Thus oil drilling might be covered, but certainly not for the risk of climate change triggered by CO2 emissions.

In Norway, the situation is slightly better, but the likelihood of getting compensation for climate change damages is uncertain. Judges have a tremendous discretionary power because they have to ascertain that the causal contribution was a “substantial” one. The big Norwegian company Statoil is only responsible for a very limited share, it is in the hands of the judges whether Statoil's contribution is to be regarded as “substantial” or not. One could argue that Statoil is ranked amongst the 31 biggest polluters worldwide, see the CDP Global 500 Climate Change Report 2013 that we presented recently. Which contribution should be regarded as substantial if not the one of one of the biggest 40 polluters in history? But doubts remain: the share of Statoil is not as big as the 3 to 4 % of the biggest 5 polluters listed in the study. If we understand the CDP Global 500 Climate Change Report 2013 rightly, Statoil's share in CO2 emissions can be estimated at about 1 %.

Another hindrance in Norway is that joint and common liability seems to be limited to cases of conscious cooperation of tortfeasors. Conscious cooperation of tortfeasors is difficult to argue for in the case of climate change damages. We could thus at best expect proportionate compensation in Norway.

Certainly some of the very big oil companies like Shell and BP are also operating in Norway. But they do so via daughter companies like AS Norske Shell or BP Norge AS. Will e.g. the share of Shell worldwide be attributed to AS Norske Shell? Or is it possible to sue successfully the mother company of AS Shell Norske together with AS Norske Shell so that the worldwide share of Shell can be referred to for the question of “substantial” contribution? Only if at least one of the two questions was to be answered positively, we could assume rather good prospects for victims of climate change when suing in Norway. Unfortunately, we cannot assess these questions as of today. And even if the questions were to be answered positively, we would expect at best proportionate compensation, thus no compensation of the full damages.

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