Key Takeaways
- Justice officials advised the government to let the Smith v Fonterra case run its course, recommending no legislative change while proceedings were underway.
- Despite this advice, the government moved to amend climate laws, introducing a statutory bar that would block tort claims related to greenhouse‑gas emissions.
- Official briefings warned that a statutory bar could create longer‑term legal uncertainty and that there was no measurable evidence the ongoing litigation was harming business confidence.
- The legislation was applied retrospectively, drawing criticism from the New Zealand Bar Association for breaching the rule of law.
- Green Party co‑leader Chlöe Swarbrick condemned the move as an attack on the public’s right to hold major polluters accountable.
Background of the Smith v Fonterra case and government response
In mid‑2025 climate activist Mike Smith filed a civil claim in the High Court against six major New Zealand emitters, alleging that their greenhouse‑gas emissions constituted a public nuisance. The case attracted significant attention as a potential landmark for holding corporations legally responsible for climate‑related harm. As the proceedings progressed, the government announced it would amend climate‑change legislation to prevent similar suits from being brought in the future. Justice Minister Paul Goldsmith framed the move as a clarification intended to give businesses certainty about their legal obligations, arguing that ongoing litigation was eroding investor confidence and deterring investment.
Justice officials’ advice and recommended status quo
Internal documents released under the Official Information Act reveal that Ministry of Justice officials counselled against any immediate legislative intervention. Their advice emphasized that the government should allow the common law to evolve through the Smith v Fonterra case, using the judicial outcome to inform any future reform. Officials warned that pre‑emptive changes could be premature and might overlook nuances that only a court judgment could reveal. The recommended course was to maintain the status quo until the court delivered its decision, thereby ensuring any legislative response would be grounded in a clear factual and legal record.
June 2025 briefing details
A briefing dated June 2025 reinforced the officials’ position, stating bluntly: “We recommend that no action be taken on the reform of the tort of public nuisance at this stage.” The briefing argued that it would be premature to consider policy reform while the relevant court proceedings were still underway. It noted that once the High Court issued its ruling, the government would be in a stronger position to evaluate the reasoning and facts presented by the judiciary, providing a more informed basis for any future legislative consideration. The briefing also outlined two possible legislative pathways should reform later be deemed necessary: a statutory bar on emissions‑related tort claims, or a requirement that the Attorney‑General approve any public‑nuisance action before it could proceed.
March 2026 Cabinet paper and Regulatory Impact Statement findings
By March 2026 a draft Cabinet paper acknowledged that introducing a statutory bar could produce a “longer‑term, unintended effect of decreasing certainty in the law,” even though the government publicly claimed the change was meant to address uncertainty caused by the Smith v Fonterra case. The accompanying Regulatory Impact Statement (RIS), released in April 2026, reiterated that the Ministry of Justice’s preferred option remained the status quo. However, the RIS noted that the Cabinet paper had instead selected “immediate legislative change to impose a statutory bar on emissions‑related tort claims” as the preferred option. The RIS critically examined the government’s problem definition, pointing out that it rested on an assumption that the ongoing litigation was damaging business and investor confidence—an assumption for which no concrete evidence had been gathered.
Analysis of business confidence assumption and lack of evidence
The RIS highlighted a significant gap in the government’s rationale: while officials had consulted legal experts, they had not sought a business perspective to test whether the Smith v Fonterra case was actually affecting confidence. The report stated, “While acknowledging that some consultation has occurred with legal experts, the panel considers that a lack of any business perspective means that the underlying question of the impact on business confidence has not been adequately tested.” Furthermore, the RIS found no identifiable evidence that the ongoing court proceedings had produced a measurable impact on business confidence. It did, however, concede that a statutory bar would shield emitting businesses from tort liability, thereby reducing legal‑risk planning costs and limiting expenses associated with defending litigation or complying with potential court orders.
Retrospective application and criticism from the New Zealand Bar Association
Although the Ministry of Justice recommended that any reforms be applied prospectively—meaning they would affect only future conduct—the government opted to apply the statutory bar retrospectively. This decision meant that the legal change would also cover conduct that had already occurred, potentially extinguishing existing claims like Smith’s. The New Zealand Bar Association swiftly criticised the retrospective application, arguing that it undermined the rule of law by altering legal rights after the fact and could set a dangerous precedent for future legislative interventions in ongoing litigation.
Political reaction: Greens co‑leader Chlöe Swarbrick’s comments
Following the release of the internal documents, Green Party co‑leader Chlöe Swarbrick told RNZ that the government’s decision to curtail the public’s right to hold major polluters accountable was becoming “unhinged” with each new piece of information revealed. She pointed out that ministers had asserted the change was vital for business confidence, yet official advice showed no business perspective had been consulted or obtained to support that claim. Swarbrick warned that the move could provoke more litigation rather than less, might not deliver the promised cost savings, and represented a profound breach of legal principle by applying the law retrospectively.
Implications and conclusion
The episode exposes a tension between the executive’s desire to provide regulatory certainty for emitters and the judiciary’s role in developing common‑law principles through active litigation. While the government frames the statutory bar as a tool to stabilise business confidence, the official advice it received cautioned against acting before the courts had spoken, highlighted the absence of evidence linking the case to economic harm, and warned of potential long‑term legal uncertainty. The retrospective nature of the amendment has drawn sharp criticism from legal professionals, who view it as an infringement on the rule of law. Meanwhile, opposition politicians argue that the change undermines accountability for climate‑related harm. As the Smith v Fonterra case continues to evolve, the ensuing legal and political debate will likely shape New Zealand’s approach to balancing climate responsibility, corporate liability, and legislative certainty for years to come.