4 New Square Chambers’ Daniel Saoul KC, Saaman Pourghadiri and Anson Cheung explore the dynamic landscape of ESG litigation, with a particular focus on fiduciary responsibilities for directors and trustees.
Key topics:
ClientEarth vs. Shell Case Study: Dan provides an in-depth analysis of the landmark ClientEarth vs. Shell derivative claim. Despite Shell’s board setting net-zero targets for 2050, ClientEarth argued that its strategies were insufficient. The court ruled in favour of Shell, emphasizing directors’ discretion, and applying the Foss v. Harbottle principle, even suggesting an ulterior motive from ClientEarth. This case illustrates the rigorous standards derivative actions must meet in ESG contexts.
Fiduciary Decision-Making in ESG: Saaman discusses how directors and trustees can balance ESG considerations with fiduciary duties, examining foundational cases like Cowan v. Scargill and Butler-Sloss. Topics include principles of proper purpose, relevant considerations, and the importance of beneficiaries’ perspectives when aligning ESG goals with investment policies.
Procedural Challenges in Derivative Actions: The episode underscores the procedural hurdles in derivative actions, especially within ESG litigation, where early presentation of expert evidence is often crucial to meet threshold requirements.
Sections 90 and 90A FSMA: Anson reviews the alternative routes available under the Financial Services and Markets Act (FSMA) for claims of securities fraud. She shares insights into a recent case where 4 New Square members successfully defended against a strikeout in the Court of Appeal, highlighting the courts’ more lenient approach in cases of corporate misrepresentation compared to derivative claims.
International Perspectives on ESG Litigation: Expanding on the global dimension of ESG litigation, the episode examines a Singaporean case involving alleged misconduct by a company director and a New York case on pension fund divestments from fossil fuels. These cases reveal the varied procedural and jurisdictional considerations in ESG litigation across different legal systems.
This episode offers essential insights into the latest trends in ESG litigation, including fiduciary challenges, procedural hurdles, and international perspectives on holding boards accountable.
