A court in the German city of Hamm has dismissed a high-profile lawsuit brought by Peruvian farmer Saul Luciano Lliuya against energy giant RWE, ending a ten-year legal battle that sought to link one of Europe’s biggest emitters to climate change unfolding in the Andes.
Lliuya, a farmer and mountain guide from Huaraz, argued that RWE’s historic carbon emissions had contributed to the melting of nearby glaciers, raising the risk of deadly flooding from the swollen Lake Palcacocha above his home.
He sought partial damages in line with the company’s share of global emissions, estimated at nearly 0.5 per cent since the industrial era by the Carbon Majors database.
The court ultimately ruled that the risk to Lliuya’s property was not sufficiently imminent to justify damages and dismissed his case without the possibility of appeal.
But experts say the ruling from the Higher Regional Court establishes that communities that can demonstrate a concrete threat of harm induced by climate change can seek compensation from fossil fuel majors under German civil law.
Despite the outcome, Lliuya called the ruling a step forward for climate accountability.
“Today the mountains have won,” he said in a statement.
“This ruling shows that the big polluters driving the climate can finally be held legally responsible for the harm they have caused… This case was never just about me. It was about all the people who, like us in Huaraz, are already living with the consequences of a crisis we did not create. This ruling opens the door for others to demand justice.”
A door opens for future lawsuits
The judges said they couldn’t award damages in this specific case because the flood risk to Lliuya’s home didn't meet the legal threshold to do so.
But the ruling did send clear signals about the legal possibility of holding fossil fuel companies responsible for climate damages.
“For the first time in history, a higher court in Europe has ruled that large emitters can be held responsible for the consequences of their greenhouse gas emissions. German civil law is applicable in the context of the climate crisis," Dr Roda Verheyen, lawyer for Luciano Lliuya said in a statement.
She added that the ruling was a "milestone", giving tailwind to climate lawsuits against fossil fuel companies.
It marks an "important moment" for climate litigation, according to Joana Setzer, asssociate professor at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science.
"While the Court ultimately dismissed the individual claim, it confirmed a powerful legal principle: companies can, in principle, be held legally liable for the harms caused by their contribution to climate change.
Setzer explains that the ruling affirms a key legal principle. Just as courts have confirmed that companies have a responsibility to chage their future behaviour in response to climate change - such as in the recent Milieudefensie v Shell verdict - they can also be held accountable for damagecaused by past emissions.
“This verdict adds strength to a growing field of climate litigation. Over 60 cases around the world are currently seeking to hold companies liable for climate-related losses and damages.
"Today’s decision offers a powerful precedent to support those efforts, by confirming the legal foundation for corporate climate liability.”
A 'historic landmark ruling' for future cases
The case was among the first to try to hold a single fossil fuel company financially responsible for specific climate damages. Although it was ultimately dismissed, the implications of this ruling are already rippling outward.
The judges made several important points that could help future lawsuits in countries with similar legal requirements, such as Japan and the US.
They also pushed back on a number of common arguments used by fossil fuel companies to evade responsibilty including that only government policy changes can deal with climate change.
“For decades the fossil fuel industry has propagated the narrative that it is not responsible for climate change," says Benjamin Franta, asssociate professor of climate litigation at the University of Oxford.
"Unfortunately for RWE and all other companies whose emissions are damaging our environment, Saul’s landmark lawsuit has exposed this narrative as the falsehood that it is."
The ruling referenced studies, like those used to back up Lliuya’s case, which attribute a share of historic carbon emissions and the damage done by those emissions to specific companies or countries.
"As climate attribution science grows in scale and accuracy, legal pressure on companies to contribute to the climate costs they are responsible for will likely keep growing," Franta adds.
"That includes businesses in the US, where dozens of cities, counties, and states have sued fossil fuel producers for climate-change-related damages and adaptation costs since 2017. Policymakers, in the US and beyond, are also working on laws that would directly hold polluting companies financially responsible for climate damages."
The tide, Franta believes, is turning with Lliuya’s case just the beginning of a new era of corporate accountability.
Germanwatch, the NGO that backed Lliuya’s case from the start, called the decision “ground-breaking”.
“The court’s decision … is actually a historic landmark ruling that can be invoked by those affected in many places around the world,” the NGO said in a statement.
