Thursday, July 16, 2015

Norway: chances for getting climate change damage compensation higher than previously estimated

Statoil Oil Platform in the Statfjord oil field
off the coast of Norway
In a previous blogpost, we have taken the view that the chances for getting compensation for climate change damages in Norway are rather limited. We now double-checked this assessment by evaluating additional sources. As a consequence of the renewed assessment, we now consider Norway to be close to or equal to the most promising European states, Sweden, the Netherlands and the Czech Republic.

A source used for the previous assessment vaguely suggested that joint liability is limited to cases where there is conscious cooperation of tortfeasors. We checked now more sources dealing with joint liability in order to verify whether this hypothesis is true (see source list below). This limitation could not be found in any of these additional sources. The absence of the requirement “conscious cooperation of tortfeasors” already justifies some upgrading of Norway's status to be a potential candidate for climate change litigation.

Moreover, some facts could be identified in these sources which increase the chances for winning lawsuits aiming at climate change compensation:
  • The rules regarding causality proof are generous. E.g. Paragraph / Section 59 of the Pollution Control Act provides: "A person that causes pollution1 that alone or in combination with other causes of damage may have caused the pollution damage, is regarded as having caused such damage unless it is established that another cause is more likely. " Lawyers question whether this rule deviates from the general rules on the burden of proof in Norwegian tort law. This means that rules regarding causality proof must be rather victim-friendly in general terms as well.
  • The Pollution Control Act provides for a damage compensation right based on strict liability (see Paragraphs / Sections 53 onwards). Surprisingly, it is not excluded that CO2 emissions would fall under the definition of “pollution”, see its Paragraph / Section 6 . However, Paragraph / Section 56 excludes liability for legal/tolerated pollution, unless the pollution is “unreasonable or unnecessary”. Thus we must rather assume that under the Pollution Control Act no liability can be claimed from CO2 emitting industries as long as they keep their activities in legal limits. But:
  • Even if CO2 emissions were not to fall under the Pollution Control Act, it is not excluded that Norwegian judges were to apply the strict liability rule – be it by analogy to the Pollution Control Act, be it because there is a growing tendency to impose strict liability by judge-made law.
Furthermore, there are several other factors which practically favor climate change compensation:
  • The Norwegian law is basically open to transnational tort lawsuits;
  • Class actions are possible;
  • The rules on standing are so generous that established associations may sue on behalf of the victims (however the obligation to pay for the defendant's costs when losing the case is prohibitive);
  • Economic loss in principle is recoverable like any other damage.
However, one question mark arisen in our previous blogpost on Norway remains. We wrote: “Judges have a tremendous discretionary power because they have to ascertain that the causal contribution was a ‘substantial’ one.” For more details on this aspect, please see our previous blogpost. Without this question mark, Norway would possibly have to be ranked on top of all states worldwide with regard to the chances to obtain compensation for climate change damages; the more so as the Norwegian Statoil and the Dutch/British Shell, both drilling Norwegian oil and gas, are amongst the top CO2 emitting companies worldwide.

Recommended for further reading in English:

  1. For the purpose of The Pollution Control Act, “pollution” means:
     1. the introduction of solids, liquids or gases to air, water or ground,
     2. noise and vibrations,
     3. light and other radiation to the extent decided by the pollution control authority,
     4. effects on temperature
    which cause or may cause damage or nuisance to the environment.
    The term “pollution” also means anything that may aggravate the damage or nuisance caused by earlier pollution, or that together with environmental impacts such as are mentioned in items 1 to 4 causes or may cause damage or nuisance to the environment.

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