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Commercial Disputes Spotlight Series: Andrew Short and ESG

Posted on 14 June 2022

In the second edition of our spotlight series, we spoke to new partner Andrew Short about his recent promotion, and the latest developments in Environmental, Social and Governance (ESG) litigation.

Andrew was promoted to Junior Equity Partner in Mishcon de Reya's commercial litigation team in April 2022. He advises clients across a number of sectors, including financial services, healthcare, construction, technology and insurance and has experience acting for governments and state organisations. He holds a particular interest in environmental and climate change litigation. Andrew recently advised a number of environmental organisations in bringing a landmark complaint with the OECD against a large UK power plant operator.

Becoming a commercial litigator

I always wanted to be a litigator –  even before I started my career it was what I always imagined a lawyer to be. As a trainee my first seat was in corporate and it felt like I just wrote board minutes and amended documents – it wasn't for me. Then I did three litigation seats. I loved the variety of it all. As a litigator, you get to become a real expert in a particular topic even if just for a short period of time. Over the years I have had to immerse myself in everything from the break-up of the Soviet Union, through to phone hacking, insulation and the toxicity of aerosols.

On qualification, I had planned to be an insurance lawyer, but I was pulled into the Berezovsky v Abramovich case and became a commercial litigator instead. It was a great experience getting involved in a three-month trial at such an early stage in my career. I handled applications dealing with all sorts of issues relating to disclosure, privilege, third parties and expert witnesses. I also had the dubious honour of being in charge of the trial bundle. Famously, the case was the first of its kind to use the sophisticated electronic bundling software which is now commonplace, particularly following the COVID-19 pandemic and remote hearings. Back then everyone was a little worried it might not work and so, as well as doing everything electronically, we also had back up hard copies. Just one copy of the bundle (some 300+ files) took up an entire wall of the biggest courtroom in the Rolls Building - not exactly environmentally friendly!

Joining Mishcon de Reya

I joined Mishcon because of its reputation in litigation – there aren't many places as good as Mishcon to be a proper commercial litigator. But I also joined because of the culture – there's huge scope to develop your own practice area and the firm has great confidence in your abilities.

Now I'm a Partner in the team I have much more responsibility. Not only am I accountable for the delivery of quality client service, I'm also the person liable from a regulatory perspective. There's also now a lot more non-billable work to fit in, from business development to team management. But it is exciting stuff –  the commercial disputes team is growing and I'm delighted to be able to shape its future direction.

A changing world

Clearly climate change is now a huge issue for us all. I remember as a child, being interested in the environment was considered to be only for 'hippies'! But now, we're all worried about what the future holds. That can be seen in our day-to-day activities: recycling facilities are now ubiquitous, eating habits are changing and people are thinking more carefully about their carbon footprint. As public consciousness has grown, so too has corporate consciousness, and while corporates have been talking about green credentials for some time, they are now being asked to really substantiate their claims. COP26 signalled a big change, particularly the financial sector's $130 trillion commitment to net zero. But there's still a big question about who will enforce these commitments. Will regulators step in, or will it be left to individual claimants?

ESG claims

ESG litigation has been around for a while – NGOs can, and do, seek judicial review to hold the Government to account but previously they had struggled to make claims stick against corporates, save perhaps in response to a large environmental disaster event. This is changing in a big way. The increased promotion of corporates' green credentials creates exposure, particularly amongst a much more enlightened world. Shareholder activism (such as the  disruption of AGMs) is on the rise. Regulation is tightening in this area and more and more corporates are being told to "prove it" when it comes to the statements they have been making for years about their green credentials. In today's world this can, more often than not, lead to share price falls which opens up the potential of claims being brought by shareholders under the Financial Services and Markets Act 2000. We are also seeing increases in claims relating to carbon credit schemes, investment management (particularly in the context of so-called green funds) and in pollution matters.

But ESG claims face challenges. Shareholders need to establish both loss and causation, and for NGOs and charities, funding is a challenge, particularly in circumstances where the objective is not necessarily a damages payment. However, philanthropic funding is increasing, which will certainly help.

It is a new and exciting area of law, and litigious work. As a fundamentally important part of the world, playing a part in it is very appealing to me. In the past, I was involved in crisis management for corporate defendants – helping them look at their governance issues and how to set themselves up to ensure better accountability.

More recently, I've been working more on the claimant side. For example, we are working with The Lifescape Project who are challenging the current classification of wood biomass as a renewable energy source. That claim is still ongoing, but through that, I've become more involved with Mishcon Purpose, which brings together specialists across the firm to help clients navigate the increasing complexities of sustainability and ESG issues.

The future

In the short term, I think we will probably see many more greenwashing claims against corporates that are failing to live up to their own green publicity. NGOs and shareholders will continue to bring regulatory actions and seek judicial review of Government policies as well as bringing actions against regulators for failing to enforce those policies.

We have already seen a number of claims against big corporates in relation to pollution overseas, but I think we will also start to see increasing numbers of claims arising out of environmental damage done in the UK.

So far defendants have mainly been construction and oil companies, but that too is likely to change. More companies could be at potential risk if, for example, they don’t get their ESG statement or their corporate documentation right. We might also start to see claims against organisations who fail to check that their green credentials follow on through into their investments and suppliers.

ESG is a hot topic for corporates and for good reason!

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