Climate Justice and Corporate Liability: Responsibility for Climate-Related Risks after Luciano Lliuya v. RWE AG

This article was co-authored by Amy B. Webster, Associate.

The Higher Regional Court (Oberlandesgericht, OLG) of Hamm, Germany, recently delivered a significant judgment in the climate litigation case of Luciano Lliuya v. RWE AG [28.05.25]. While the court dismissed the claim for proportional contribution to the cost of climate change adaptation measures on the basis that the threat of damage was  insufficiently high, it importantly confirmed that major greenhouse gas emitters could, in principle, be liable for climate-related risks.

Luciano Lliuya, a Peruvian farmer and mountain guide, initiated the lawsuit against RWE, Germany’s largest power producer in November 2015. Mr. Lliuya sought to hold the company partially responsible for the costs of protective measures against flooding risks posed by a nearby glacial lake. Mr. Lliuya’s claim sought to maintain that RWE’s historic greenhouse gas emissions have contributed to climate change, increasing the risk of glacial lake outburst floods in the city of Huaraz.

Mr Lliuya sought damages reflecting RWE’s estimated share of global emissions (0.47%) since the industrial revolution. Specifically, Mr Lliuya  sought approximately €17,000, which he claims was 0.47% of the total cost to protect his home town from flooding.

The Decision: Dismissal on Evidentiary Grounds

The court ruled against Mr. Lliuya, on evidentiary grounds, concluding that the threat of damage was not sufficiently imminent to establish liability under German civil law.

The German Civil Code (Section 1004 (1) sentence 2 BGB) provides that, to establish liability,  the tortfeasor must cause an actual or imminent impairment to property through their actions. The case turned on detailed expert evidence, and the court found that while climate change is contributing to an increase in glacial lake volumes, the probability of an event such as an ice avalanche, glacier collapse or rockslide occurring in the next 30 years was not sufficiently likely to meet the threshold of imminence.

Recognition of Potential Future Liability for Major Emitters

Although the court ultimately dismissed the claim, it did not reject the principle that major emitters may be held liable for climate-related damages. The court confirmed that the German Civil Code applies to climate risks, including transnational claims involving ongoing or imminent unlawful harm. Significantly, it dismissed the notion that climate change must be addressed solely through political means, affirming that individual liability under civil law is a viable pathway for redress.

The court addressed the question of causation, and the extent to which a partial contribution towards global emissions can be found to have caused a specific event, in consideration of various global warning theories and contributing factors. It concluded that RWE’s contribution, while only 0.47%, was substantial. The Court noted that each large emitter contributes less than 3.6% of total emissions, and that their cumulative impact drives climate change. Consequently, if the threat to property is imminent, a single emitter can be held liable for a proportional share of the risks posed by their emissions should those risks materialise.

Implications for Future Litigation

Although Mr. Lliuya’s individual claim was dismissed, the ruling by the court represents a major milestone in climate litigation. For the first time, a high court has formally acknowledged that major corporate greenhouse gas emitters can, in principle, be held liable under civil law for climate-related risks. The Lliuya ruling provides a potentially valuable legal foundation that may support arguments in ongoing and future similar cases, such as Asmania et al v Holcim and Hugues Falys, FIAN et al v TotalEnergies which also involve transnational corporate liability for climate risks, and which are currently before European courts.

Comment

Lliuya shifts climate change beyond political debate and firmly into the domain of civil law.

Whilst a German case, the decision heightens the prospect of further climate litigation in courts globally, especially against transnational major emitters, irrespective of where they are based and where they operate.

The success of such cases will be largely dependent on expert evidence and the nuances of local legislation. However, it should be a wakeup call for corporate policyholders and their financial lines insurers - in principle, companies and their boards can be held financially responsible for the climate impact of their operations. In these types of cases, defence costs alone will be significant and reputational risk will no doubt be a serious consideration.

Some are already questioning the German Court’s decision. It was held that the evidence of the Court appointed experts did not support a finding that there was a real and imminent risk to Mr Lliuya’s home. However, as the tragic events in Blatten, Switzerland have shown us, the impact of climate change is difficult to predict and can even surprise experts. What happened in Blatten was the very risk that Mr Lliuya is trying to avoid.

This case is being hailed a success by climate change activists and we can only assume that climate litigation will continue to gain momentum.