INSURANCE MARKET UPDATE

Legal Review

Dutch court ruling cites emissions targets

In May, a Dutch court ordered Shell to reduce its overall CO2 emissions by at least 45% by 2030 from 2019 levels, well ahead of the company’s own planned targets to reduce emissions. The case was brought by MilieuDefensie (a Dutch environmental organization whose name means Friends of the Earth Netherland) and other non-governmental organizations (NGOs) on behalf of a group of thousands of Dutch citizens who were concerned that the energy giant’s posture was not aggressive enough on climate change.

The case, decided under Dutch law, was premised on the claim that Shell’s current policy on climate change involved a threat of human rights violations relating to the “right to life” and “undisturbed family life.”

This decision, in which for the first time in history a Dutch court ordered a private company to comply with the 2015 Paris climate agreement, may have far-reaching consequences. Although Shell has stated that it will appeal, the ground breaking decision has the potential to influence many of the approximately 1,800 lawsuits related to climate change pending in courts globally, and to inspire additional lawsuits.

US Court of Appeals issues significant opinion concerning the test for seaman status under the Jones Act.

A second US Court of Appeals hearing has affirmed a prior district court ruling that a land-based welder directed by their employer to complete two discrete, short-term assignments aboard vessels is not considered a seaman.

The significance of this ruling is that a “seaman” under the Jones Act is granted a cause of action against their employer for negligence. The negligence action is not available to land based workers, whose exclusive remedy are benefits defined in the Workers Compensation Act.

The Court of Appeals concluded that case law defines two types of workers on drilling rigs. A “seaman” is defined as a vessel crew member who conducts the drilling operations, or a worker who supports that activity and stays with the vessel from one location to another. Whereas, specialised transient workers (usually employed by contractors) engaged to perform discrete short-term jobs while a vessel is in port, only have a “transitory or sporadic” connection to a vessel and are not categorised as “seamen.”

UK High Court dismissed P&I club’s human rights challenge

An oil tanker that sank off the coasts of Spain and France in 2020 caused an oil spill that resulted in approximately USD billion of claims against its P&I insurers. The P&I club (a mutual insurer) appealed to overrule a Spanish court judgement on the basis it would be manifestly contrary to English public policy to recognise and enforce the Spanish judgment because it would be contrary to fundamental human rights. The P&I club claimed the Spanish court had convicted the ship's master of a crime against the environment for the first time at an appeal, which would not be possible under English law.

The UK High Court dismissed the appeal as the P&I club failed to show that any of its own rights were breached, stating, "what the Club is seeking to rely on is alleged violations of rights conferred on a defendant [the ship’s master] to a criminal charge. It is not relying on its own rights, nor does it point to the rights of a party to civil proceedings, or to a contravention of its own rights in the Spanish proceedings. Furthermore, the Club did not assert any rights it had itself, and it took no steps to seek redress for contravention of any such rights in Spain.”

This case reinforces that organizations may be subject to foreign court rulings regardless of where they are headquartered.

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