Get all your news in one place.
100’s of premium titles.
One app.
Start reading
The Independent UK
The Independent UK
National
Brian Farmer

Environment campaign organisation loses High Court fight with Shell directors

PA Wire

An environment campaign organisation has lost another round of a High Court fight with directors of oil giant Shell.

ClientEarth, a shareholder in Shell, had raised concern about Shell’s “climate change strategy” and wanted to make a “breach” of duties claim against directors.

A High Court judge in May refused to give ClientEarth permission to continue its claim after considering written arguments.

ClientEarth has now failed in a bid to persuade Mr Justice Trower to reconsider his decision.

The judge, who had considered oral arguments at a recent High Court hearing, in the Rolls Building in central London, on Monday ruled against ClientEarth for a second time.

It appears to me that ClientEarth’s application and the evidence adduced in support of it do not disclose a prima facie case for giving permission to continue the claim
— Mr Justice Trower

He concluded that that ClientEarth’s application should be dismissed.

“…it appears to me that ClientEarth’s application and the evidence adduced in support of it do not disclose a prima facie case for giving permission to continue the claim,” said Mr Justice Trower in a written ruling.

“In the light of the fact that the matter has now been reconsidered at an oral hearing, I will also make an order dismissing the claim.”

Shell directors had argued ClientEarth’s reconsideration application should be dismissed.

Mr Justice Trower had published a ruling in May after considering written arguments.

He had said in his May ruling that, in order to pursue its claim, ClientEarth had to show there had been “an actual or proposed act or omission involving negligence, default, breach of duty or breach of trust” by a director or directors.

The judge had dismissed the charity’s application after concluding that it had not produced sufficient evidence to support its claim.

Barristers representing ClientEarth then outlined the “premise” of the charity’s case at a hearing.

Shell directors had “already identified” climate change risk as a “material factor” that “impacts on their duties” to promote the company’s long-term commercial success, they said.

Lawyers argued that the long-term success of the company required an “effective and workable” climate change strategy, and said plans adopted by Shell directors were “irrational”.

They argued that strategies adopted by directors constituted a “breach of their duties” and said ClientEarth’s claim should be allowed to proceed.

Lawyers representing Shell argued that Mr Justice Trower’s May ruling was “unimpeachable”.

They said ClientEarth had received “minimal support” from shareholders and argued that the judge should “stand by” his decision.

Mr Justice Trower said, in Monday’s ruling, that ClientEarth held “only 27 shares in Shell” and indicated that a “very small proportion of the total shareholder constituency” supported the charity’s claim.

He said it was the “constituency as a whole” whose “views should carry very considerable weight” when determining how Shell could “best manage the climate change risk”.

Lawyers representing Shell had suggested that ClientEarth’s motivation was not the company’s “best interests”.

Mr Justice Trower said there was “substance” in that argument.

“In my view, the fact that ClientEarth is the holder of only 27 shares in Shell, but is nonetheless proposing that it should be entitled to seek relief on behalf of Shell in a claim which on any view is of very considerable size, complexity and importance (and will be exceptionally expensive and time-consuming to pursue), gives rise to a very clear inference that its real interest is not in how best to promote the success of Shell for the benefit of its members as a whole,” said the judge.

“In short, there is substance in Shell’s submission that ClientEarth’s motivation is driven by something quite different from a balanced consideration as to how best to enforce the multifarious factors which the directors are bound to take into account when assessing what is in the best interests of Shell.”

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.