Eloise Gibson is Newsroom's environment and science editor. She's written for the New Zealand Herald, Stuff.co.nz, The Listener, and BBC Future.com. Twitter: @eloise_gibson.

environment

Councils may be liable for climate damage - QC

Local authorities that fail to prepare for climate change might find themselves in court, a top lawyer has warned.

The umbrella group for councils, Local Government New Zealand, has warned local government politicians it “may only be a matter of time” before councils face claims for damages for failing to adapt their communities to climate change.

Just as the government was found negligent for leaky buildings and for letting the kiwifruit virus PSA in the country, councils might find themselves liable for climate damage - for example if they let people build in the path of storms, floods and rising seas, according to a paper prepared for LGNZ by a leading barrister, Jack Hodder QC.

The legal opinion was presented to rural and provincial councils earlier this month, Newsroom understands, and later circulated to all councils by email.

The warning comes as a minority of councils decide whether to sign up to LGNZ’s Local Government Leaders’ Climate Declaration stating there is an urgent need to address the threats of climate change. Most councils have signed but others remain skeptical of the value of joining. Thames-Coromandel mayor Sandra Goudie has refused to say whether she believes climate change is real, while West Coast Regional Council – the area projected by climate models to be most at risk from more extreme rainfall – has rejected the government’s proposed Zero Carbon Bill and asked for more evidence to prove climate change is happening.

Newsroom reported in late 2017 that Thames-Coromandel council was still approving multi-million dollar housing developments on the waterfront after considering as little as 0.49m of sea level rise. Guidance at the time was to consider 0.8m and newer guidance is to consider up to 1.9m, however, a 73-unit apartment block for the elderly, expanding the retirement village Richmond Villas, was approved based on a 2001 flood hazard assessment, then 16 years old.

A year after Newsroom’s special inquiry was published, and 18 months after approving the new development, Thames Coromandel District Council put a warning notice on the Richmond Villas title saying the land it was built on was considered at risk of flooding, overland flow, storm surge and tidal effects.

In January 2018, six months after the council approved the new apartment block, Radio NZ reported that a storm surge came over the seawall and flooded the entrance to the existing units.

LGNZ sent Jack Hodder’s opinion to elected officials with a note suggesting they discuss the implications.

“Up until now, it perhaps has been unclear whether councils may be liable for failing to provide climate change adaptation measures, or allowing developments to proceed in at risk areas, particularly where those decisions have physical and economic consequences for individuals/communities. LGNZ’s view has been that councils are exposed to legal risks, and that local government in New Zealand will not be immune from the growing international trend of climate change litigation by individuals and groups against larger organisations,” said the letter.

“To test whether LGNZ’s thinking was on the right track, and to clarify the position for councils, LGNZ engaged Mr Hodder to prepare a paper addressing whether there are climate change litigation risks for councils.”

Until now, court cases against councils have been led by affected homeowners unhappy that risk notices had been slapped on their titles, warning future buyers about climate risk. Homeowners in Kapiti and elsewhere argued the risk was not well-enough supported by evidence. Hodder's opinion suggests the longer-term risk may be the opposite - legal action by homeowners who are at risk and wish councils had done more. But any decisions to take defensive action or place restrictions on development would need to be very carefully weighed up, and backed up by information and evidence to stand up in court, he said.

Hodder concluded that climate changes cases around the world were getting more numerous, and creative. Unless central governments stepped in to properly tackle climate change risks, judges would likely step in, he wrote. “There has not yet been any large damages claims in relation to failure to implement adaptation measures in New Zealand. However, it may be only a matter of time,” noted LGNZ in its note to local politicians. “We encourage you to discuss Mr Hodder’s paper with your council, to start thinking about how you can prepare for the likely changes and the steps that you can take to reduce your council’s exposure to litigation risk.”

The local government group also noted that private insurers were already starting to price in increasing coastal hazards into policies, with possible implications for property prices. “If the Government does not move, they will effectively be saying: let the courts, commercial insurers and banks set the rules.”

(The Government has previously said it is working on updated sea level measures to help councils, however the process is taking some time).

Hodder cited the Kiwifruit growers’ case against MAF (now part of MBIE), where the High Court concluded that the Ministry of Agriculture and Forestry was negligent in issuing an import permit for kiwifruit pollen in 2006/07, saying MAF's regulatory power to maintain biosecurity gave it a duty of care to kiwifruit growers who were devastated by the PSA outbreak. That case is now heading to the Court of Appeal. Hodder has been representing the government.

Hodder also mentioned the leaky building cases, when New Zealand courts found territorial authorities were meant to “ensure” that building work complied with the Building Code, giving them a duty of care owed to residential home-owners (including future owners). That ruling imposed huge costs on councils and years of litigation. His paper concluded that handling climate litigation would be difficult but "doing nothing requires a surprising level of bravery".

LGNZ declined to comment to Newsroom on the legal opinion but today distributed a press release skewering the government’s lack of action and saying litigation would consume councils’ resources and time.

“Ratepayers may face hefty legal bills due to a lack of government action on adaptation policy, according to a leading legal opinion by Jack Hodder QC,” said the release.

LGNZ President Dave Cull said councils were in a tough position: on one hand, they had no legislative framework to support decisions to manage climate change risks, while on the other councils (and ratepayers) potentially faced significant costs through legal action if councils did not adequately factor in climate risks to their decisions.

“Without a national climate change adaptation framework, councils are in a grey area when working out how to protect their communities,” said Cull in the statement. “To the Government’s credit it has started to focus on the problem, thanks to the efforts of Climate Change Minister James Shaw, but we need more action in the adaptation policy space, and urgently.”

LGNZ recently released another report, which found that as much as $14 billion of local government infrastructure is at risk from rising sea levels.