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November 30, 2021
Simon Walsh, special counsel in Cadwalader’s Global Litigation Group, featured on a panel discussing class actions arising out of Environmental, Social and Governance risks as part of the “Global Class Actions Symposium 2021.” The event, delivered to both a live audience and via virtual platform, brought together leading practitioners in the area of collective redress from across the globe.
Walsh, based in Cadwalader’s London office, was joined on the panel by Daniella Strik of Linklaters in the Netherlands and Anne Gron of AlixPartners in the U.S. The chair was Molly Lane of Morgan, Lewis Bockius LLP, also based in the U.S.
The panelists commented on how Environmental, Social and Governance (ESG) claims were now widespread and should not be confused as being limited to just environmental claims: in fact, ESG covered a wide ambit of other issues such as anti-bribery, human rights issues and data protection. Having said that, environmental claims, such as climate change litigation, were on the rise in Europe both as against states, for failing to meet climate change targets, and against private companies for contributing to climate change, thereby causing damage to property.
The panelists discussed how courts in the U.S. and England were grappling with the calculation of damages for such cases and how a key issue would be how individual claimants could prove that damage sustained by them was a direct result of a company’s or state’s climate change contributions, which remained a challenge despite advancements in attribution science. The viability of these claims for damages on a mass scale also relied on funding, the availability of which would also be driven by the clarity over the likely damages (where damages, as opposed to injunctive relief, were sought).
Walsh highlighted how ESG claims were set to grow in the securities class action space, and that England’s attractiveness as a destination for such claims was growing, in part because of decisions of the English Supreme Court which have found that UK-based parent companies can face liability for breaches of ESG obligations carried out by their foreign subsidiaries “if it can be shown, or if they have held themselves out, as having substantial supervision or control of those operations.” This, Walsh said, “widened the possibility that issues which have occurred in foreign jurisdictions where the political and judicial landscape might not be so favourable” would “allow forum shopping for those claims to be brought in England.” Walsh also noted: “given the increasingly globalized commercial world,” companies will increasingly “be exposed through their global supply chains to issues such as modern slavery,” which could lead to further securities class actions claims from investors.
Visit here for a full event recording.