Legal Drivers for Climate Change Adaptation Livable Cities Forum Halifax, Nova Scotia September 12, 2016 Laura Zizzo Zizzo Strategy Inc.
Zizzo Strategy Inc. Climate change is re-defining risk management, legal liabilities and business imperatives New multi-disciplinary strategic consultancy firm o lawyers and engineers We help o understand critical issues, o create frameworks to enable better decision making, and o implement effective and efficient solutions. Asset owners, builders and operators Industry Associations & Not-for-profits Governments Utilities Financial services & institutional investors
Agenda Overview of Climate Impacts Context: International and National Legal Drivers for Adaptation o Common Law: Negligence o Legislative Requirements o Policy considerations o Reasonableness
Potential Climate Impacts Increasing precipitation & intensity of storms More frequent severe freezing/thawing cycles More frequent intense summer heat days Water level fluctuations Water quality and availability changes Increased costs due to impacts on physical assets & potential legal liability Significant need to adapt
Climate Related Risks to Infrastructure Toronto Calgary Photo courtesy of Tom Ryaboi Photo courtesy of the Canadian Press
$ Billion Risks Related to Climate Impacts Catastrophic Insurable Losses in Canada (in billions of 2015 dollars) 4.0 3.5 3.0 2.5 Loss + Loss Adjustment Expenses Estimated Trend Eastern Ice Storm Alberta and Toronto Floods 2.0 1.5 Ontario Wind and Rain 1.0 0.5 0.0 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015* Source: IBC Facts Book, PCS, CatIQ, Swiss Re, Munich Re & Deloitte
2013 Intergovernmental Panel on Climate Change (IPCC) Report indicated increase in extreme weather and heavy precipitation throughout the century. More to Come
Jurisdictional Context
Paris COP 21 Universal Agreement to address climate change! Goals: Limit warming to well below 2 C above pre-industrial levels and pursue efforts to limit increase to 1.5 C Decarbonization of economy in second half of century Nationally determined contributions 5-year global stocktakes, transparency through UNFCCC secretariat Global direction + collective movement = no turning back? Private Sector Movement FSB Task Force on Climate-related Financial Disclosures
Canadian Context Federal Vancouver Declaration/Pan-Canadian Framework Provincial Movement: o Carbon pricing established (Quebec, BC, Alberta) or forthcoming (Ontario, Manitoba, etc ) o Low-carbon standards (Federally and Ontario, etc ) Reporting requirements (including securities disclosure) Shift in markets and investor attention
Response to Climate Change Required mitigation e.g. Cap and Trade e.g. PPS and Official Plans Required adaptation Voluntary adaptation e.g. Negligence Voluntary mitigation
Legislative Requirements
Legislative/Regulatory Liability Overview Greater adaptation requirements in legislation o Direct incorporation of climate change considerations o Indirect incorporation of climate change considerations Additional liability for decision makers Standards developing (some by design, some reactively)
Legislative Requirements Ontario Infrastructure for Jobs and Prosperity Act, 2015 o Infrastructure should be designed to be resilient to the effects of climate change Ontario Water Opportunities and Water Conservation Act (2010) o May require assessment of climate risks British Columbia Living Water Smart strategy o Outlines new approaches to water management that will address the impacts from a changing water cycle, increased drought risk and other impacts on water caused by climate change. o Promises to link climate change consideration to provincial funding
Negligence Insurer Bear own costs Plaintiff (harmed) Private parties (neighbours, designers, manufacturers) Governments
Negligence Injury to person(s) or property because another failed to take reasonable care o Duty o Standard of Care o Causation, Foreseeability, Damages Possible Defendants: Owner or occupier (including government) Government entities Engineers, architects and other design professionals Contractors
Standard of Care Relying on outdated standards/processes can be negligent if new info suggests they should be reconsidered Factors to determine standard of care: Industry standard of practice is key (encourages coordination) Statutory requirements considered, not determinative Standard at the time of act that is being claimed as negligent Guided by reasonableness in the circumstances
Evolving Standards Historical data can no longer adequately predict the future Need for better vulnerability assessment tools: o E.G. PIEVC New standards of care Application of climate models Risk management frameworks
Class Actions A real and present threat currently at least two major cases regarding flooding with municipal defendants: City of Thunder Bay ($300M) City of Mississauga ($200M) Uses traditional causes of action (e.g. negligence) Efficient and improved access to justice Representative plaintiff for similarly situated, defined class Common issues decided together
Farmers Insurance Class Action Chicago area April, 2013 flood Insurance companies subrogated claims municipal & local public entity defendants Referenced climate change rainfall reasonably foreseeable in light of climate change models Complaint withdrawn issues remain valid
Special Issues Inspection schemes can be both policy or operational based on facts of the case o Inspections must be carried out non-negligently o Negligent conduct of owner/occupier doesn t absolve municipality Permitting could be negligent o Little case law, but some guidance that if authority knew or should have known there was a risk before issuing permit could be negligent Enforcement could be negligent o Decision not to enforce a by-law could be negligent
Shared Responsibility Those with potential responsibility: Municipalities Employees/contractors (can t delegate a duty) Consultants/Professional advisors (need to use professional judgment and reasonable standard of care) Property owners Community and Individuals (may need to report and mitigate) Other orders of government Working with insurers to understand risk andmitigate losses
Take aways: Risk of common law liability significant. Can reduce risk through conscious policy decisions Actively assessing risks and coordinating best practices for stormwater management with fellow municipalities will be valuable in demonstrating both appropriate standard of care and that it was met Provincial role, communication and education key
Be CONSISTENT and ACCURATE Identify Problem Policy Solution Implement consistently and with due diligence Role for standards, education, all in context of what is reasonable
Thank You Laura Zizzo laura@zizzostrategy.com 1.888.664.7723