In brief - Councils can take action to offset litigation risk
There are a number of things councils should do to offset the risk of litigation by asset owners who are projected to be affected by rising sea levels.
Rising sea levels may pose significant litigation risk for councils
Despite the naysayers, climate change seems inevitable: the Intergovernmental Panel on Climate Change's 2013 report projected a rise in sea levels of up to 0.98m by 2100. Councils approving developments in locations susceptible to rising sea levels (or failing to warn of its risks when providing information about sites) are an obvious target to litigant asset owners who suffer inundation attributable to climate change. Drastically diminished asset values and economic losses from climate-related business interruption means that future liability accruing to councils by litigated recoveries is potentially catastrophic. Despite these risks, in November 2014 the former Minister for State Development and the Minister for Infrastructure and Planning formally directed that a Queensland council is not to include allowance for projected sea level change in its planning instruments. What can councils do to offset the risk of being sued for planning decisions or planning instruments which ignore the current state of scientific learning on future sea levels?
Liability insurance an option, but always take reasonable precautions
Future liabilities can be offset by insuring against the risk of liability for council's negligence. However, where councils are already cognisant of climate change implications, care must be taken that councils do not breach insurance policy requirements that the insured take "reasonable precautions" to prevent a loss. Availability of policy indemnity may be prejudiced where an insured entity has actual knowledge of a known risk and consciously or recklessly "courts the risk".
Proportionate liability may apply
A defendant council may avail itself of the proportionate liability regime in the Civil Liability Act 2003 if other "wrongdoers" also contribute to the claimant's loss. Such wrongdoers could include providers of professional services engaged in the construction or transfer of the property.
Joinder of parties may provide indemnity or contribution
The permissible range of issues a council can consider in assessing development applications is subject to legislative prescription by the State government or could be the subject of a Ministerial Direction like the one given in November 2014. If sued, a council might seek indemnity or contribution by the joinder of governmental authorities which restrict a council's capacity to consider climate change issues.
Planning and development law may change
Finally, relief may lie in future legislation. The current draft of Queensland's Planning and Development Bill 2014 contains provision for an immunity where a council is required to amend its local planning instruments in compliance with a Ministerial Direction. However, it remains to be seen whether the Bill in its current form will be passed into law, particularly given the changing Queensland political landscape.
A version of this article first appeared in the Council Leader magazine.