Debating climate change liability: legal defeat in Germany for Peruvian farmer in case against RWE

In a landmark ruling, the Higher Regional Court of Hamm today dismissed a lawsuit brought by a Peruvian farmer seeking damages from energy giant RWE for the risk of flooding connected to melting glaciers. The case has brought liability of CO₂-emitting companies for the global consequences of climate change into the spotlight in Germany and internationally. It raises critical questions about whether greenhouse gas emitters can be held accountable for climate-related risks occurring thousands of kilometres away. After many years of litigation, this first ruling by a court of appeal had been eagerly awaited. Like the Regional Court in the first instance, the Higher Regional Court rejected the claim, albeit on different legal grounds. 

Background of the case

The case was the first of its kind in Germany. It has occupied the German courts for many years and caused considerable controversy. The legal journey began with a complaint filed at the Regional Court of Essen that was backed by the NGO Germanwatch, followed by an appeal and an intricate fact-finding mission. The case became emblematic of the growing movement worldwide to hold companies liable for transboundary climate impact.

The Peruvian claimant, Saul Luciano Lliuya, sought to hold RWE responsible for its historical CO₂ emissions, which he alleged contributed to the melting of glaciers near his hometown of Huaraz in Peru. He argued that the resulting climate-related phenomena, such as the swelling of a glacial lake above his property, posed a credible threat of flooding and, therefore, jeopardised his home and livelihood. The Peruvian sued RWE for partial reimbursement of the costs of securing his property, claiming that the company’s 0.47% share of global emissions translated to a proportionate responsibility for the localised risk. His claim rested on section 1004 of the German Civil Code (BGB), which allows property owners to demand action against individuals or entities that threaten their property.

At the end of 2016, the Regional Court of Essen dismissed the action as partially inadmissible and partially unfounded. In particular, according to the Regional Court, there was no proof of the necessary causal link between the emissions and flooding risks (if any).

The Higher Regional Court initially took a more favourable view of the claimant and in 2017 ordered an examination of the evidence, indicating it considered the claim generally plausible. This interim conclusion was considered as groundbreaking at the time, as a German court acknowledged for the first time that liability of CO₂-emitting companies for the global consequences of climate change is not excluded on the basis of German general legal principles. However, after intensive examination of the evidence, which included a site visit to Peru in 2022 and a detailed hearing of experts in 2025, the court has now dismissed the claimant's appeal. The judgment is final and – although this can be challenged – no appeal has been allowed.

Key findings of the Higher Regional Court

The reasons for the ruling are not yet available and must be awaited for a detailed analysis. However, according to the court's official press release, it seems that the Higher Regional Court's decision was based on different grounds than the Regional Court's judgment. 

Climate change liability in principle possible

In its press release, the court generally acknowledged the principal possibility for claims under section 1004 BGB for damages caused by CO₂ emissions. It suggested that if a claimant can demonstrate a direct and real threat to their property linked to emissions by a specific emitter, that emitter might bear legal responsibilities. Contrary to the defendant's argument that the vast geographic distance between RWE’s power plants and the claimant’s home in Peru precluded accountability, the court deemed distance not as a general disqualifying factor. The court also clarified that the contribution of individual citizens is so insignificant that they cannot result in liability, so that a theoretical liability of every single citizen is not an argument against a general liability of large CO₂ emitters. RWE’s counterargument that it was acting on the basis of a statutory mandate for public service in Germany was also not accepted by the court.

No liability established

Despite acknowledging the theoretical foundation of the claim, the court ultimately ruled against the claimant due to insufficient evidence for an actual and significant threat to his property. Expert analysis had concluded that the probability of a flood caused by the glacial lake reaching the claimant’s home within the next 30 years stands at only 1%. The experts had added that even in the unlikely event of flooding, the resulting water height and flow velocity would not materially damage the structural integrity of the claimant’s home. These findings prompted the court to determine that the threat was not substantial or imminent enough to warrant legal liability on RWE’s part.

The claimant argued that a “climate factor” should be included in risk assessments to account for the increased probability of extreme weather events due to global warming. However, the court sided with the expert witness, who conducted a specific analysis based on local conditions, rather than relying on broader statistical models advocated by the claimant.

Implications for climate change litigation

The court’s decision marks a major setback for the claimant, who will likely not be able to bring this in front of the Federal Court of Justice, the German supreme court in civil law matters, for a decision on the Higher Regionals Court’s arguments. 

However, depending on the details of the written ruling, it might open a broader discussion on climate change liability. By stating that emitters could, in theory, be held liable for the consequences of their emissions also outside their own borders, the court was open to consider claims arising from climate harm on a global scale. Yet, based on the press release, these statements appear to be merely obiter dictum, and it remains to be seen whether other courts will follow suit. Thus far, first and second instance courts have set high standards and dismissed all complaints (aimed at injunctive relief, changing the companies’ business models, see e.g. here and here). The German Federal Court of Justice has not had a say thus far, but may soon get the opportunity in the context of appeals pending against the injunctive relief cases.

Regardless of this, it is worth emphasizing that the court established a high evidentiary threshold in the RWE case, which underscores that claimants face significant hurdles in climate change litigation. Establishing a concrete and imminent threat linked directly to a specific emitter’s actions will remain a major challenge. The court also attempted to clarify boundaries by reassuring defendants, as liability would still depend on a tangible link to significant harm, which remains difficult to establish in practice.

For businesses, the ruling nevertheless underscores the importance of preparing for potential liabilities related to climate impacts. Although the threshold for claims remains high, companies may face increasing litigation risks as legal frameworks and scientific attribution techniques continue to evolve. Being proactive in assessing and mitigating their environmental impact, as well as setting up and implementing climate transition plans in view of the national and international climate protection targets, remains prudent, both to meet regulatory expectations and to prepare for potential future claims.

With a broad cross-jurisdictional team of experienced ESG litigators, Linklaters is well-placed to advise on national as well as international ESG litigation risks. Please do get in touch with any of our experts should you wish to discuss the impact of this judgment or similar decisions on your business.