Government to amend climate change law because court claims are 'creating uncertainty in business confidence and investment.' Greens slam move

The Government is amending the Climate Change Response Act, with Justice Minister Paul Goldsmith saying “the courts are not the right place to resolve claims of harm from climate change.”

On Tuesday, he said ongoing litigation in the High Court, where an applicant has brought civil claims against six businesses for their greenhouse gas emissions "is creating uncertainty in business confidence and investment that the Government must address."

Goldsmith said the Government was acting to give legal clarity and certainty, and to remove the possible development of a new regime contradicting the framework Parliament has enacted to respond to climate change.

"Therefore, the Government will amend the Climate Change Response Act 2002 to prevent findings of liability for tort for climate change damage or harm caused by greenhouse gas emissions in both current and future proceedings before the courts," Goldsmith said.

The Ministry of Justice’s website describes torts as common law actions where someone seeks compensation for harm caused by a wrongful act.

The Green Party has hit out at the move, saying the Government is "loosening the leash for corporate profits at the expense of our people and our planet".

'It seems really short-sighted'

The litigation that Goldsmith is referring to, involves iwi leader and activist Mike Smith, who in 2024, was granted permission by the Supreme Court to sue companies like Fonterra, over their greenhouse gas emissions.

Lawyers for Climate Action co-founder and president Jenny Cooper told interest.co.nz the Government's announcement was disappointing and a knee-jerk reaction for the Government to legislate over the top of a unanimous decision of the Supreme Court in Smith and Fonterra before the case has even gone to trial.

"It's also got much wider implications so I think it's really not well thought through. To completely cut out the possibility of any tort-related claims for climate-related harm before we have any kind of legislative framework to address that issue."

Cooper said it leaves the question of who is going to pay for the harms unanswered. "It seems really short-sighted to give this, essentially, immunity, under tort law to the people who are responsible [and] the companies are responsible for causing the harm when we haven't got any alternative in place".

Clarity and certainty

Goldsmith said the response to climate change is best managed by the Government at a national level, not through "piece-meal litigation in the courts."

“New Zealand already has a legal framework to manage greenhouse gas emissions set through Parliament through the Climate Change Response Act 2002 and the Emissions Trading Scheme.”

“It is essential to maintain the coherence of the regulatory system and to deliver consistent obligations for greenhouse gas emitters,” Goldsmith said.

“The courts are not the right place to resolve claims of harm from climate change, and tort law is not well-suited to respond to a problem like climate change which involves a range of complex environmental, economic and social factors.”

'Parliament is the place where we set our response to climate change'

Speaking to reporters following his announcement, Goldsmith said: “It’s about Parliament being clear that Parliament is the place where we set our response to climate change. We weigh up all the various factors. It’s a complicated area.”

“We have a regime in place and people can argue about whether that regime is good or not, and that’s a democratic process. But that is the accountability. To have a parallel, separate one, I think creates uncertainty.”

The law change would not change the Government’s responsibilities under the Climate Change Response Act and businesses that have obligations under the Emissions Trading Scheme will have to meet them.

Asked about this law amendment, Climate Change Minister Simon Watts told reporters he thought having clarity in regards to policy was helpful.

'Difficult to see how this benefits New Zealand'

Cooper said there were a few problems with removing the option of having tort-related claims for climate-related harm.

“First of all, as a basic principle, if people suffer harm and it’s someone else’s fault, then they should be able to seek a remedy," Cooper said.

"The second point is that the law should not be retrospective … if you have already suffered harm that you have a claim against somebody for, you should be able to pursue that and the law should not come in and take that away from you when you've already got that claims or suffered that harm.”

Cooper said the third point was that if someone has a case that’s already in front of the courts, Parliament should not come in and change the rules halfway through.

“That is a very important principle of the rule of law, which potentially, if it goes ahead, this legislative amendment infringes on.”

While Cooper agreed that certainty of law is important, “changing the law in this retrospective kneejerk way does not provide certainty to anybody, including businesses”.

Cooper said it was really difficult to see how this benefits New Zealand.

“We’re already seeing climate-related events costing the government, councils, property and business owners millions and millions of dollars. And that’s only going to get worse.”

Cooper said there are difficult questions such as how we’re going to pay for these impacts.

“It just doesn’t make sense to block the potential development of tort law, which has provided a really effective mechanism for these types of issues in the past, to block that from developing when we have nothing else to replace it.”

“There is no legislative scheme to deal with this issue,” Cooper said.

Cooper said internationally, this would be regarded as a serious backward step by New Zealand.

“I think it would put us out of step with other countries where these kinds of claims are going ahead such as the UK, the Netherlands, Germany and a number of other countries.

“This is still a very new and emerging area of the law but we will go from being at the forefront to being at the back.”

'A wrecking ball to climate laws'

The Green Party said this was yet another example of Prime Minister Christopher Luxon "loosening the leash for corporate profits at the expense of our people and our planet."

The party's co-leader and climate change spokesperson Chlöe Swarbrick said "Luxon’s Government has decided to prioritise protecting big polluters’ profits in the limited parliamentary time before the election."

“That tells us everything we need to know about who they work for. It’s the corporations ripping us off and destroying the ecosystems necessary for life as we know it," she said.

“They’ve spent two and a half years taking a wrecking ball to climate laws and, at the eleventh hour, they’re now ripping away New Zealanders’ and the courts’ ability to do what this government lacks the spine to do."

'Pretty big move'

Labour leader Chris Hipkins said generally speaking, governments had waited until the courts have actually made decisions.

“It’s not unprecedented for a government to disagree with a court decision and change the law."

"Generally doing that, intervening before you’ve reached a point where you know what the courts were going to decide is a pretty big move,” Hipkins said.