A Change of Climate for Tort Law? A Potential Precedent in Smith v Fonterra
By Michaela Ryan-Lentini
The Supreme Court’s strike out decision in Smith v Fonterra is poised to be one of the most impactful cases of the next few years.[1] In particular, the Supreme Court’s ruling on whether or not a new climate change tort is actionable is likely to have extensive consequences. This will impact not only the fight against climate change, but the entire tort system. Tort law represents the law holding members of society accountable to a social contract that we all subscribe to by virtue of living in a society. Therefore, tortious actions usually involve taking individuals to court for the harm they have caused someone else.
The case was brought by Mr Smith, who is a climate change representative for the Iwi Chairs’ Forum. He claims that the emissions created by seven of New Zealand’s largest companies (including Fonterra, Genesis Energy, and Z Energy, among others) are damaging his land and the cultural and historical sites meaningful to whanau.[2] He also claims that they are generally contributing negatively to “dangerous anthropogenic interference with the climate system and to the adverse effects of climate change”.[3] Smith argues that the actions of the corporations: 1) constitute a public nuisance; 2) breach their duty of care in negligence; and, 3) should warrant the creation of a new tort relating to climate change.[4] The final cause of action is the focus of this article, and likely the focus of the Supreme Court’s strike out decision, as it has the potential to represent a significant shift in the New Zealand tort system.
If the claim is struck out by the Court, this will mean that the new climate change tort is considered legally impossible and that Smith’s claim under it would have no chance of success. The High Court had initially not struck out the novel climate change tort, but had struck out the other two causes of action. The Court of Appeal revoked this decision and struck out all three. If the Supreme Court disagrees and allows the claim to progress, this does not necessarily mean that Smith’s case succeeds but that it is a legally viable claim worth hearing out. This would mean that future claims could potentially be advanced under this novel tort, creating a new cause of action to hold defendants accountable for damaging the climate.
While we anxiously await the judgement of the Supreme Court, it is important to consider how a decision in favour of the new tort may fit into the structure of our law. Despite the ubiquitous nature of tort law, it is almost exclusively litigated in an individualistic way by responding to infringements between specific parties. This case will serve as an indication of if, or how, the common law can respond to a deeply communal issue. Concurrently, it will force us to grapple with the question of whether, if the Supreme Court finds it appropriate to expand tort law, the success of Smith v Fonterra is enough to form a meaningful legal tool against climate change.
The tension which this case creates within the tort system can be seen in the Court of Appeal’s decision to strike out the claim in 2021. They rejected the creation of the new tort for a range of reasons, including - perhaps most crucially - that the change would be “be contrary to the common law tradition which is one of incremental development and not one of radical change”.[5] They also reasoned that a new climate change tort would be legally illogical and systemically unwieldy and that it ultimately would prove ineffective against climate change.
The Court’s first contention that the novel climate change tort would not be appropriate for our tort system requires further attention. The concern in part arises from the fact that the seven companies did not know Mr Smith and that their actions affect many others like him who they have no easily ascertainable relationship with. Fundamentally, our tort system requires a proximate degree of relationship between plaintiff and defendant. This can range from direct physical connection, as seen in intentional torts, to the connection you have to someone who is foreseeably closely and directly affected by your actions, as seen in negligence.[6]
So far, the courts have considered that the proximity between Smith and the corporations is not close enough to warrant a claim of this nature. As a result, they have struck down Smith’s action due to concerns of it being too expansive. The Court of Appeal resolutely stated that “there is no physical or temporal proximity. There is no direct relationship and no causal proximity”.[7] The relationship is indeed novel, as it does not fit within precedent cases that have found proximity on a large scale. For example, the case of Carter Holt Harvey v Ministry of Education allowed somewhat sweeping liability, but only because there was an element of contractual connection between defendant and plaintiff.[8] Smith v Fonterra lacks even this, involving only the relationship arising between someone living and relying on the earth, and someone damaging it. However, it may still be possible that finding a sufficiently close relationship in this case is not inconsistent with the philosophical basis of tort law.
The upholding of tort law’s social contract has been legally expressed on a mostly individual scale, characterised by disputes between clearly defined and distinct groups. The limits drawn on tortious liability through containing the scope of relationships that can be litigated are considered crucial to preventing the issue of opening the floodgates of liability. This is a predicted occurrence which fears endless liability and which is referenced in the Court of Appeal decision as a factor lending to the claim being struck out.[9] However, it seems that making tortious liability subject to the floodgates concern fails both the purpose of tort law and allows for easy rejection of meritorious claims that do, in fact, have a genuine relationship.
Caroline Foster articulates the second aspect of this clearly, stating that “the fact that there are multiple contributors to the harm and multiple persons affected does not alter the fact that the members of these groups are in a close relationship with one another by virtue of the harm that is being inflicted”.[10] Rejecting claims on the basis that there are too many possible plaintiffs fails to recognise that where a very large amount of harm is being done, upholding justice through tort law actually necessitates that the claim succeed. Foster contends that the scale of the human-to-human relationships created by climate change is unprecedented.[11] She writes that those causing the emissions have created new “deep and intimate relations with the individual members of future generations, every aspect of whose lives their present day activities will affect”.[12] It seems to be morally urgent that tort law take effective legal action against defendants who are causing damage to a very large group, rather than resolutely sticking to barriers that were built when such relationships were incomprehensible.
As Foster explores, a tortious relationship should not be disregarded or seen as less valid because it is widespread. Climate change invokes this point strongly. It is more likely that the type of damage being done by the corporations is actually so impactful that it simply creates many genuine relationships between their actions and people living on the earth. Therefore, widespread liability has become a consequence that climate-damaging companies should have to accept as a result of their actions. In these situations, though, the floodgates concern present in the law currently renders liability essentially unattainable, leading to a paradox with the purpose of tort law to uphold justice. Successfully upholding our involuntary social contract should not be subject to whether the infringement is done on a small scale. It should instead be able to function most effectively when infractions are made on a large scale. There seems to be no philosophical reason that the social contract cannot be upheld on a communal scale - especially because communal application of the contract underpins how it functions constantly between unconnected people. Allowing defendants like these companies to escape liability ignores the in rem (against a thing) nature of the rights imposed by tort law.
The Court of Appeal also found it important that the success of Smith v Fonterra would, in their view, be ineffective against climate change because courts are not well placed to solve this global issue. The Court highlighted multiple issues on this point, including that the seven companies chosen are unlikely to have a particularly notable impact on climate change given the global nature of the issue. They also considered that litigation in this area would lack the required systems and conflict with legislative mechanisms in place already working to prevent climate change.
In their strike out decision, the Court of Appeal highlighted that the “claim is brought against a small subset of those responsible for the harm that is being suffered by Mr Smith and those he represents”.[13] Likewise, “none of these defendants standing alone makes a material contribution to climate change”.[14] Despite this, it seems indefensible for tort law to have no response to climate change at all because the courts are unable to solve the entire problem. Entirely eradicating illegality and infringements has never been the basis on which the private law system exists. The goals of tort law involve deterring defendants, providing compensation to victims and holding people to account morally. The law rarely claims that if it is unable to entirely solve an issue no legal action should be taken at all. This would be unthinkable in criminal law and should be considered equally inappropriate for tort law.
Additionally, taking on litigation under a new tort would aid in the legal system promoting a united front against climate change rather than conflict with existing frameworks. It would allow the court to begin to develop the requisite systems to quantify and ascertain the amount of damage being done by the companies. Rather than being a reason to not take on climate change claims, as indicated by the Court of Appeal,[15] the absence of existing judicial mechanisms can instead be framed as a motivating factor. In practice, it represents the lack of tools we currently have against climate change that must be remedied. An acceptance of the novel climate change tort also has the potential to inspire our legislature, or international jurisdictions, to take further action. Such a decision may also start encouraging corporations to keep climate concerns at the forefront of their decision making. Foster describes this role as being a “contribution” to other areas of law that “can only be valuable”. [16]
Concerns of this nature will only become more pressing as we move into the future; therefore, the time for the courts to adapt the law and its systems is now. The principles of communal responsibility are already present in tort law and are readily applicable to finding liability on this larger scale. Smith v Fonterra is providing the judicial system a chance to reform its attitudes towards fighting climate change and to use tort law as means to hold corporations accountable. As we move into an unprecedented era of climate instability, the courts must urgently shift their interpretation of the principles and precedents of tort law to protect against widespread infringement of our communally held rights.
[1] Smith v Fonterra Co-operative Group Ltd [2021] NZCA 552.
[2] Supreme Court of New Zealand “Media Release Smith v Fonterra Co-Operative Group Ltd” (media release, 8 August 2022).
[3] Smith v Fonterra, above n 1, at [4].
[4] Smith v Fonterra, above n 1, at [6].
[5] Smith v Fonterra, above n 1, at [103].
[6] Donoghue v Stevenson [1932] UKHL 100.
[7] Smith v Fonterra, above n 1, at [25].
[8] Carter Holt Harvey v Ministry of Education [2017] 1 NZLR 78.
[9] Smith v Fonterra, above n 1, at [116].
[10] Caroline E. Foster “Novel Climate Tort? The New Zealand Court of Appeal decision in Smith v Fonterra Co-operative” (2022) 24 Environmental Law Review 224 at 229.
[11] At 228.
[12] At 228.
[13] Smith v Fonterra, above n 1, at [19].
[14] At [19].
[15] At [24].
[16] Foster, above n 10, at [234].
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