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The recent unveiling of Prime Minister Boris Johnson’s Green
Industrial Revolution has once more put the fight against climate change at the
forefront of government policy. While much of the focus of Johnson’s plan and
climate action generally is on the development and commercialisation of new
technologies (such as carbon capture and storage, and hydrogen fuel), lawyers
have also quietly been playing their part in making contemporary business
transactions more environmentally friendly. As the drafters of contracts and
arbiters of disputes, lawyers have immense power to help protect our
environment through the introduction of environmentally friendly clauses and
practices; after all, small actions performed often, and by many, yield big
Enter green legal initiatives such as The Chancery Lane Project (TCLP),
whose vision is a world where ‘every contract and law enable solutions to
climate change’. TCLP is by no means the only climate initiative founded by
lawyers to fight against climate change; the Campaign for Greener Arbitrations,
for example, is an initiative to reduce the environmental impact of
international arbitrations. It is, however, novel in that it brings lawyers
together to re-imagine mundane and traditional contract clauses (such as boilerplate
clauses) in a climate-friendly manner, with the aim of making their use
The Big Hack
This year, to coincide with Pro Bono week, TCLP held its Big Hack,
a two day virtual hackathon bringing lawyers from across the world (including
members of the Lexis®PSL team) together to brainstorm new contract clauses and
strategise over how to incorporate clauses published within the TCLP’s Climate
Contract Playbook into their firms’ precedent banks. During the event, various hacking
sessions took place covering specific legal ‘themes’, including the aptly named 'Coolerplate' session, which saw lawyers come together to rethink boilerplate
These clauses are generally not given much thought, yet they can
have a significant impact on the other clauses in an agreement and on an
agreement as a whole as they deal with important issues such as the
interpretation, validity and enforcement of an agreement, making them valuable
candidates for the introduction of environmental considerations.
Interesting ideas discussed during the 'Coolerplate' session
included a force majeure clause which would integrate an evaluation of the
party’s actions to avoid or mitigate a climate change event, and a clause where
environmental rights are an exception to a third party rights clause pursuant
to the Contracts (Rights of Third Parties) Act 1999. Of
particular interest to the authors, however, were the clauses focused on
arbitration, which we believe to be an area that has a lot of potential for
Arbitration ‘Coolerplate’ clauses
There is a surprising lack of literature relating to ‘green’
arbitration clauses, with even the TCLP’s latest Climate
Contract Playbook only containing three general arbitration-related clauses, and no
specific arbitration boilerplate clause. As is traditional for TCLP
publications, each clause is named after a child known to the author, to remind
readers of the impact these clauses might have on the next generation, for whom
these changes are so important. The existing arbitration clauses cover green
arbitration protocols (Emilia’s clause), low carbon arbitration hearings (Mia’s
Clause), and green arbitration processes (Toby’s clause).
These three clauses encourage the reduction of carbon intensive
activities such as printing off unnecessary paperwork or travelling to
different locations for hearings. The relative technical ease of implementation
of these clauses has therefore been demonstrated during the coronavirus
(COVID-19) pandemic, notably with virtual hearings (other barriers are covered
in this blog post).
While it represents an important first step, the legal community still needs to
do more in the current state of climate emergency (situation
notably recognised by the European Parliament, see here).
Notably, a potentially impactful development in this space may
come out of the recent Big Hack: A group of lawyers had the interesting idea to
develop a green governing law clause for arbitration agreements. Instead of
focusing on issues which are secondary to the substantive part of the
arbitration (eg consumption of paperwork), the choice of green governing law
clause has an impact on the core element of the dispute resolution. This clause
aims to allow parties to select an ‘eco-friendly’ jurisdiction for the
governing law of the arbitration agreement and incorporate additional ‘green’
principles, climate objectives, and environmental regulations to be respected
in the event of an arbitration. While currently in development, this clause will
hopefully be available in the next edition of the Climate Contract Playbook.
Green arbitration guidelines are also being considered.
In the near future, we particularly hope to see arbitration
institutions integrating environmental provisions into their arbitration rules
and lawyers adopting them for use in their clients’ contracts. Before then, it
is the responsibility of the legal community to integrate existing
environmental principles and considerations into alternative dispute resolution
processes and to mainstream this tool. After all, lawyers are the driver of the
green legal revolution.
If anyone is interested in sharing their views or getting involved
in the development of green clauses, feel free to email Elodie Fortin (email@example.com) and Marie-Gabrielle Williams (firstname.lastname@example.org).
Written by Elodie Fortin and Marie-Gabrielle Williams.
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