As the recent heavy rainfall and the associated flooding in Bavaria and Baden-Württemberg have shown, extreme weather events are becoming more and more frequent, with increasing damage. According to current projections, insurers estimate the insured losses caused only by the flooding at around €2 billion. However, the actual damage caused is likely to be much higher.
Climate change is one of the greatest challenges of modern times. It is no news that companies contribute to global climate change through their direct or indirect emissions of greenhouse gases. Therefore, for some years there have been legal endeavors to enforce the civil liability of companies for environmental catastrophes. The judgement against one of the largest oil companies in the world (ECLI:NL:RBDHA:2021:5337) in the Netherlands received worldwide media attention, and the appeal decision is expected in November of this year. In Germany, too, the public has become increasingly interested in so-called climate litigation—but it is not only energy companies or car manufacturers that are feeling the headwinds, but also financial institutions.
So far, there has been no positive outcome to a climate litigation in Germany, but it is worth taking a closer look at the individual standards and their interpretation to be able to assess whether and, if so, under what circumstances claims could be justified.
In German civil law, which is based on the German Civil Code (BGB), the question arises to which extent companies can be held liable for climate damages.
As there is often no contractual relationship between the injuring party and the injured party, liability can only be considered on the basis of statutory liability standards, in particular tort law.
German tort law is governed by Sections 823 et seq. BGB. The central standard is Section 823 para. 1 BGB, which regulates claims for damages in the event of a violation of absolute rights such as life, limb, health, freedom, property, or another right. The prerequisite is an unlawful and culpable act that leads to damage.
The application of Section 823 para. 1 BGB to climate damage is complex. A claimant would have to prove that concrete damage has been caused by emissions of a company and that there is a causal link between the company's behavior and the damage. This is particularly difficult in the case of climate damages, as the effects are cumulative and global.
In current case law, the violation of legal interests has been discussed frequently. Violation of fundamental rights, in particular the general right of personality, is often invoked, but rejected as a result. In the case of a Peruvian farmer against one of the biggest German energy companies (Higher Regional Court of Hamm, Ref.: 5 U 15/17), the Higher Regional Court of Hamm appeared to consider a violation of legal interests by imminent violation of property to be possible in principle. In particular, liability for property infringements caused by climate-change-related environmental phenomena therefore does not appear to be ruled out a priori.
One of the biggest obstacles is proving causality. In this context, causality is often referred to as the "cardinal problem" of tortious liability. In principle, the claimant bears the burden of disclosure and proof, which requires full proof. This is difficult in the case of climate damages, which result from the cumulative effect of emissions from many different sources worldwide.
It is difficult to clearly identify the emissions of an individual company as the cause of specific damage. In addition, extensive scientific evidence is required to prove the link between emissions and climate damage.
A distinction is often made between damage caused by natural events that occur slowly but steadily, such as the melting of the polar ice caps or glaciers (so-called "slow onset events"), and those that occur suddenly, such as forest fires and continuous rainfall (so-called "sudden onset events").
In any case, most climate scientists agree that the slow onset events are almost certainly attributable to man-made climate change. In the case of the most recent events in Germany, which are classified as sudden onset events, a claim therefore appears doubtful.
The case of the Peruvian farmer shows that causality is also affirmed in principle by the judges in these proceedings, even though many polluters are jointly responsible for the damage caused by their carbon dioxide emissions. This appears to have been resolved in the proceedings, with the energy company held liable for only 0.47% of the damage, which corresponds to its share of global CO2 emissions since industrialization.
Another problem is whether the carbon dioxide emissions caused by the companies are also unlawful.
It is often argued against unlawfulness in this context that the companies emit carbon dioxide in accordance with public law, which permits or authorizes their activities.
However, this argument is contradicted by the fact that there is no principle according to which authorizations under public law exclude liability under civil law. Furthermore, certain public law regulations also stipulate liability for expenses or damages if the authorized activity results in property damage.
The liability of companies for damages under tort law for climate damage in Germany in accordance with Section 823 para. 1 BGB is not excluded in principle. However, the proof of causality especially requires comprehensive justification and evidence.
The legal liability of companies for climate damages remains a dynamic and controversial field. However, increasing awareness of environmental problems and legal developments could lead to more legal claims being brought against companies in the near future. This applies because climate change–related damage is becoming increasingly common. The field of climate litigation is therefore also becoming more and more of interest for insurance companies, which often have to pay for the damage. Large companies are therefore advised to rethink environmental strategies and take proactive measures to protect the climate to prevent potential liability risks.
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