Climate Change and Environmental Law: Implications of the Landmark Decision in ‘Sharma’ Being Overturned

Last year, in the case of Sharma v Minister for the Environment (2021), the judge found that there was a novel duty of care owed by the Minister to Australian children who might suffer ‘catastrophic harm’ from the climate change implied by the approval given to an extension of the Whitehaven Vickery coal mine in New South Wales.

This landmark decision seemed likely to have considerable consequences for environmental impact assessments and the approval of relevant projects. The implication was that failure to ensure business activities were ‘climate friendly’ could result in a liability in negligence.

This judgement of a single justice in the Federal Court was always likely to be appealed. In March 2022, a three-judge panel sitting in the Full Federal Court unanimously overturned the original decision.

One important aspect of the original judgement did survive. The Court rejected the Minister’s argument that the primary judge had made unfounded findings based on evidence of climate change. The factual findings by the primary judge concerning the risk of harm of climate change to children remain. The Full Court noted that ‘the nature of the risks and the dangers of global warming, including the possible catastrophe that may engulf the world and humanity’ were not in dispute.

It is quite possible this decision will itself be appealed. One judge had commented that it is up to the High Court to ‘engineer new...sustainable duties of care’.

Notwithstanding this latest decision, climate-related litigation is a real risk not just for those businesses generating emissions but also service providers and financiers. Further legal challenges will likely emerge using duty of care type arguments.

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