A door the Government tried to close is now wide open
The Government’s pitch for amending the Climate Change Response Act was simple: kill Mike Smith’s climate liability case, remove the legal uncertainty hanging over major emitters, and let Parliament rather than the courts decide climate obligations. On 28 June 2026, Smith filed fresh High Court proceedings that blow that logic apart.
This is not a continuation of his original tort claim. It is a separate judicial review aimed squarely at the Government’s decision-making process. Smith alleges Cabinet consulted the six defendant companies before announcing the law change but denied him the same chance to be heard, and that the legislation was designed to disrupt his live case. The upshot for business is uncomfortable. The six companies now face two proceedings instead of one.
Who is actually on the hook
Smith v Fonterra names six major emitters: Fonterra, Genesis Energy, Dairy Holdings, New Zealand Steel, Z Energy and BT Mining. Between them they account for roughly a third of New Zealand’s greenhouse gas emissions. After several strike-out attempts, the Supreme Court reinstated the claim in 2024, clearing it for a full High Court trial scheduled for April 2027.
In May 2026, Justice Minister Paul Goldsmith announced the Government would amend the Act to stop courts making liability findings in civil climate claims based on emissions. The change would apply retrospectively, extinguishing Smith’s case and barring future ones. Goldsmith said the litigation was “creating uncertainty in business confidence and investments that the government must address”.
The Government’s own officials disagreed
Here is where the certainty argument falls over. A Ministry of Justice briefing recommended the status quo, favouring “allowing the common law to develop to better inform the quality of any future reform” and warning it would be premature to reform while proceedings were live. Crucially, officials stated they had “not identified any evidence that the ongoing court proceedings have had a measurable impact on business confidence”.
A draft Cabinet paper went further, acknowledging the statutory bar could have the “longer-term, unintended effect of decreasing certainty in the law”, the precise opposite of the rationale offered publicly. Goldsmith’s answer was that officials provide advice but “it is for the elected Government to determine how it moves forward”.
A constitutional warning the Government commissioned then ignored
The Ministry consulted Auckland Law School associate professor Vernon Rive, who submitted a 14-page paper opposing the bar. In June 2026 he released it publicly, calling the move to stop a live case halfway through “constitutionally abhorrent”. Rive warned a statutory bar would hand corporate defendants “immunity from accountability” and was inconsistent with the Government’s own Regulatory Standards Bill.
The NZ Bar Association, a politically neutral body, also called for a rethink, warning that “if retrospective legislation becomes a regular occurrence or norm, citizens will not know with any certainty what their rights are”. That is a rule-of-law caution that should resonate with anyone who runs a business inside a stable legal framework.
Why directors and insurers cannot relax
The practical problem is pricing risk. Directors of the named emitters, their D&O insurers and lenders with balance-sheet exposure cannot quantify their legal liability until this resolves, and the constitutional challenge could drag on for years longer than the April 2027 trial would have. The litigation that was meant to be ended now has a second front.
The risk sits on top of live disclosure obligations. The FMA’s 2026 climate-related disclosures review is already requiring larger entities to disclose climate-related financial risks. Smith’s new claim also alleges the defendant companies lobbied for the change and that “their lobbying efforts disappeared from the public record”. If that gains traction, the governance and reputational fallout reaches well past emissions liability.
The certainty paradox
Globally, climate cases have grown to an estimated 3,099 filed across 55 jurisdictions by mid-2025. University of Otago commentary argues the law change signals New Zealand is no longer participating in climate legal innovation, a poor look in an increasingly climate-risk-conscious capital market.
The Government set out to deliver certainty for major emitters. Smith’s fresh challenge means there are now more open questions, not fewer. Retrospective legislation that removes accrued rights does not buy confidence. The lesson for any board is the one the Bar Association already spelled out: certainty comes from a predictable legal system, not from changing the rules mid-trial.
Sources
- Stuff: Mike Smith fresh High Court challenge over Government’s climate law change (2026-06-29)
- RNZ: Government changes climate law to prevent lawsuits (2026-05-12)
- NZ Herald: Officials told Government not to intervene in climate court case
- RNZ: Officials told government not to intervene in a climate court case
- Newswire: Government climate lawsuit ban expert warning (2026-06-10)
- RNZ: ‘Constitutionally abhorrent’ – Expert reveals advice to government on climate law change (2026-06-10)
- RNZ: NZ Bar Association calls for government to reconsider changing climate law (2026-05-20)
- Newsroom: Climate law change is a dangerous trade-off (2026-05-16)
- Science Media Centre: Govt changes law to halt climate lawsuits – Expert Reaction (2026-05-12)