Canadian Lawyer

www.canadianlawyermag.com 37 seriously, Canada likely won't see comparable levels of litigation. Hansell acts for public and private corporations and governments and advises boards, management teams and insti- tutional shareholders and regulators on legal and governance matters. "Their litigation environment's very dif- ferent from ours. They litigate much more frequently. And it's obviously 10 times bigger than we are," she says. "There is simply a lot more litigation." Hansell sees an increasing focus on en- vironmental and social governance risks — something corporations and shareholders are taking "very, very seriously." Directors need to be aware of environmental-relat- ed disclosure expectations from regulators, shareholders and stakeholders, she says, adding that government and regulators are encouraging corporations to take climate risk into account in their strategic planning and risk management. "If there's not proper disclosure of the en- vironmental risks of climate change, climate risks facing an organization, and they do, in fact, end up with some kind of a loss as a result of something that happens on the en- vironmental side, that could be a basis for a class action suit," Hansell says. An example are fires that engulfed Austra- lia in 2019, she says. "Even if you're not in Australia, if you have customers or suppliers — anybody in your supply chain. . . . That'll have a very real im- pact on your business. And, so, if you think that the fires are climate change related as opposed to some part of a normal cycle, then you need to be paying attention to the similar threats in the future." contamination" whereas climate change suits focus on the release of "carbon-based com- pounds" and there is "significant risk" carbon will not be viewed as a contaminant falling within the meaning of a pollution exclusion. "This creates an exposure risk for insurers," Tupper says. Using climate change risks and effects as a tool for litigation is coming to Canada, Tupper says, and could be further motivated by new amendments to the Canada Business Corpo- rations Act. In June 2019, the Government of Canada added a clause to s. 122(1) of the CBCA outlining the duty of care for directors and officers, adding factors that directors and officers must consider when acting with a view to the best interests of the corporation. Joining the interests of shareholders, employ- ees, retirees and pensioners, creditors, con- sumers and governments and the long-term interests of the corporations is "the environ- ment" as a factor. "So, a lot of companies are looking at that and looking at the litigation trend in the U.S. and really taking a hard look at climate change issues and the risk posed by them, which, of course, then feeds into the insurance question," Tupper says. Heather Vaughan, a partner at Benson Percival Brown LLP, says the amendments "should not in and of themselves spawn liti- gation" because the environment as a factor for consideration for directors and officers has been in common law for a decade. But Vaughan adds, "It is only a matter of time be- fore climate change litigation hits Canada. "Directors and officers, along with their insurance brokers, are going to have to think carefully about the wording of their D&O in- surance policies to make sure that they are properly protected for" these risks, she says. In Ganguly et al's article, the authors put the number of global climate change-related cases at more than 1,000, with 828 of them in U.S. courts. Carol Hansell, a senior partner at Hansell LLP, says that, while corporations and govern- ments are increasingly taking climate change "Directors and officers, along with their insurance brokers, are going to have to think carefully about the wording of their D&O insurance policies to make sure that they are properly protected for risks associated with climate change litigation." Heather Vaughan, Benson Percival Brown LLP CLIMATE CHANGE LITIGATION 2005-2015 — Phase one: Cases focused on procedural questions of standing and jurisdiction and substantive matters of causation and damage 2015-present — Phase two: Scientific advancements quantified business' historic emissions More than 1,000 cases globally, majority filed since early 2000s 828 in U.S., 263 in 25 other countries Types: (1) Strategic public climate litigation — to influence public policy (against governments) (2) Strategic private climate litigation — to influence corporate behaviour and strategies (against companies) Source: Oxford Journal of Legal Studies

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