German court dismissal of RWE climate case ‘will not end’ activist litigation trend

Despite dismissing the case, which was supported by German NGO Germanwatch, the Higher Regional Court of Hamm observed that, under German law, companies can, in principle, be held liable for climate-related damages caused by their emissions, even across borders.

Jacqueline Harris, litigation expert at Pinsent Masons, said: “The real risk to corporates of this taking hold is the creation of mass actions, which could involve significant damages having to be paid out were a claim successful. This decision is a reminder that activist groups are seeking novel approaches to hold companies to account for polluting activity. Awareness of the issues is key to mitigate their impacts.”

The case sought to hold RWE partially responsible for the cost of flood protection measures in Huaraz, Peru. It was argued that RWE’s historical greenhouse gas emissions contributed to the melting of the Palcacocha glacier, increasing the risk of catastrophic flooding to the farm of the farmer who brought the case. A scientific study which attributed a percentage of historic global emissions to RWE was used to claim that the energy firm should cover the same percentage of costs to build flood defences. The case is thought to be the first civil climate change case in Europe seeking damages which has reached the stage of evidence being considered.

Christian Schmidt, Munich-based litigation expert at Pinsent Masons, said: “The judgment will have a significant impact on the German market. It is anticipated that subsequent cases will involve a more rigorous selection process of the claimant, thereby ensuring that courts will face greater challenges in dismissing cases due to a lack of substantial risk. German courts may then have to address the complex issues of causation that these types of cases entail.”

While the court acknowledged that under German civil law, a polluter could theoretically be held liable for preventative measures, the case was dismissed because no substantial risk of increased flooding to this farmer’s farm was demonstrated. The decision followed extensive expert testimony and site inspections, with the court concluding that the likelihood of damaging flood waters reaching the property within the next 30 years was only around 1% - too low to justify legal intervention.

The court also found that even in the event of a flood, the impact on the property would be minimal, with water levels expected to reach only a few centimetres and at a low velocity. As such, the court ruled that the danger was not concrete enough to impose liability on RWE.

As a result, the court did not need to consider further questions such as whether, and if so how, a causal link can be established between a particular company’s emissions and a particular event such as a flood, nor how damages should be assessed even in the event that such a link can be established. 

Emilie Jones of Pinsent Masons said: “There therefore remain a number of considerable challenges and unknowns for claimants looking to pursue these types of claims, and important defence arguments for companies who may face them. It also remains to be seen whether other courts will be willing to follow the German court’s receptiveness to this type of claim. For example, in England and Wales the courts have typically been cautious about finding new or extensive duties of care to be owed, and about the boundaries of English law principles of causation and remoteness of damage.”

However, Harris said: “The dismissal of this case will not spell the end to attempts to attribute contribution to climate change to corporates. Although this decision was under German law, claimants will look to transfer some of the arguments and strategies to other jurisdictions. The idea of potentially attributing contribution to climate change to specific companies and holding them liable has wide reaching implications.”

The Hamm court’s decision has been much anticipated by those tracking global trends in climate litigation. Also closely watched, particularly by those in common law jurisdictions, is litigation in New Zealand against companies in various high-emitting industries including the dairy industry, in which the Supreme Court ruled in 2024 that a tortious claim in public nuisance, negligence and a novel proposed tort of climate damage could proceed to trial. In that case, the court found that such claims were at least “seriously arguable” and not precluded by existing environmental legislation. This marked the first time a common law jurisdiction has recognised that a negligence-based climate claim could be stateable.

Harris said: “The New Zealand litigation is an important one to watch as it proceeds to trial, as it may be instructive as to the circumstances in which common law systems will recognise corporate liability for climate-related harms. Additionally, with increased scientific focus, and significant advancements in technology, including artificial intelligence, the ease with which activist groups could successfully quantify corporates’ contributions to climate change or certain climate issues is likely to increase, making such claims easier to bring in future.”