Top firms rake in cash over lawsuits against gas companies

OIL and gas companies are spending tens of millions of dollars in Australia every year fighting back against the latest round of climate lawsuits brought by activists.
Top firms rake in cash over lawsuits against gas companies Top firms rake in cash over lawsuits against gas companies Top firms rake in cash over lawsuits against gas companies Top firms rake in cash over lawsuits against gas companies Top firms rake in cash over lawsuits against gas companies

Paul Hunt

Deputy Editor: Energy & Commodities

Paul Hunt

In 2020, the Environmental Defenders Office on behalf of the Conservation Council of Western Australia brought a case against Woodside Energy and the chairman of the Environmental Protection Authority  over the environmental impact of the planned Burrup Hub development. 

The legal challenge was not heard until December last year and a decision was handed down in March 2022 by justice Jeremy Allanson. The move by the activists was ultimately unsuccessful, but the determination of who needed to pay the legal bills was announced just days ago. 

The case is just one of several high-profile lawsuits lodged by the EDO against Woodside, Santos, and other gas companies (including the likes of Tamboran Resources) and coal mine proponents in recent months.  

At the end of each trial, most companies will apply for a costs order, where the court will order one party to pay for another's fees as well as other relevant expenses a party incurs during the case. 

Usually, winner takes all. However, it seems that is not the case for gas companies. 

In a recent decision handed down in the WA Supreme Court, the judge found the basis of the activist campaign against Woodside and the EPA to be in the ‘public interest' which meant costs could not be recovered by any party. 

Top tier law firm Allens represented Woodside while the State Solicitor's Office represented the EPA chairman. 

At the heart of the case was a decision by the EPA to recommend approvals for the processing of gas from Woodside's Scarborough field through the Pluto gas plant in Western Australia.

The Supreme Court subsequently quashed the Conservation Council's suit. 

This still came at a significant cost with lawyers defending them working a mammoth 2700 hours just in preparation for the case alone. 

Allens senior associates and partners spent more than 90 hours preparing for and attending three directions hearings through February to December 2021, according to Court documents. 

A further 340 hours was spent by senior associates and partners preparing a legal defence. 

Another 20 hours was spent requesting the EDO to provide more detail about their claim against Woodside and the EPA chairman. 

Junior practitioners - namely associates, lawyers and grads - spent 80 hours on similar work. 

Barrister hours, both senior counsel and junior counsel, totalled more than 325 hours. For context, some leading barristers can cost a day rate of more than $10,000 per day. 

Another 250 hours was spent on what is called ‘conferral' which consisted of meetings and calls between legal practitioners.

Justice Allanson said in total Allens senior lawyers spent more than 1320 hours on the case, Allens juniors spent 860 hours, restricted practitioners (lawyers on their L-plates) spent 200 hours on the case and clerks and paralegals spent in excess of 30 hours helping them. 

The case certainly cost Woodside several million dollars. 

"Generally, costs follow the event and are awarded to the successful party to litigation," justice Allanson said in his decision handed down this month. 

But he said costs were at "the discretion of the Court," and that the matter was a proceeding "on issues of public interest, or more specifically in litigation relating to the protection of the environment". 

Thus, he awarded no costs. 

Given the EDO and Conservation Council are both charities, it would be unlikely the organisations could pay costs. In its 2020-2021 annual report, the Conservation Trust of WA had less than $4 million in cash and cash equivalents. The EDO fundraises to pay its own legal activist team. 

Meanwhile, gas project proponents will need to continue to spend big on legal costs brought by anti-fossil fuel activist groups. 

The EDO is currently representing activist investor group, the Australasian Centre for Corporate Responsibility, which has brought a case alleging greenwashing claims against Santos. 

As part of the proceedings, the ACCR alleges Santos breached the Corporations Act and consumer laws by labelling its gas production "clean energy" and installing a net zero by 2050 target in its annual report published in 2020. 

This case is an international first and has the potential to set a precedent for companies in how they report their carbon emissions and emissions reduction goals. 

Herbert Smith Freehills is representing Santos, and as the case drags on like the Woodside case, they will continue to collect significant fees. 

This is just the latest in significant legal battles for the oil and gas industry. 

Santos was forced to respond to a review in the New South Wales and Environment Court regarding its Narrabri coal seam gas project in October last year. 

Anti-gas group Lock The Gate took the approvals for Narrabri by the state Independent Planning Commission to Court in September 2020. While they did not win, the case came at a heavy cost for Santos. 

Last year, in July, coal mining company Adani won costs against a Queensland anti-coal activist who campaigned against the development of the large-scale Carmichael mine. 

Adani (now rebranded as Bravus) and the Carmichael Rail Network launched legal action against Ben Pennings accusing him of trespassing, breach of contract, intimidation, and conspiracy to injure while also seeking compensation for losses. 

Adani alleged that the activist activity scared off a mining contractor from accepting an award to provide mining services. 

QLD Supreme Court justice Sue Brown ordered Pennings to pay 60% of the legal costs related to one fight in the court. Adani sought $600 million in damages. It then amended this to under $100,000. Two months ago, Adani dropped its claim against him and settled with a lower number worth $17 million. 

Pennings raised about $250,000 to pay for his own legal fees. 

A study in March from the Harvard Law School, titled The Rise of Climate Litigation, found there is a "clear upward trend" in activists using climate litigation. 

It found that until 2017, the total number of climate litigation cases was 884 across a total of 24 countries. About 650 of these cases were in the USA. By 2020, this number had nearly doubled to 1550 cases across 38 countries. 

This echoed analysis by Allens in 2020 which said it had noticed a "growing trend" in both enforcement of allegations of inadequate financial and governance disclosures of climate risk through litigation, and class actions concerning ASX disclosures relating to governance issues and their financial impacts. 

"Australia is becoming front and centre as a forum for activist climate change litigation against corporates, financial institutions and government," Allens said in a note in August 2020.