In a decision that has been 10 years in the making, judges in the western German city of Hamm have thrown out the case of a Peruvian farmer seeking damages from energy giant RWE for the risk of flooding connected to melting glaciers.

Delivering its verdict in the David vs. Goliath case, judges said the damage to Saul Luciano Lliuya's property from a potential glacier flood was not high enough. They ruled out an appeal.

But in a legal first, the court did rule that companies can be held liable for the impact of their emissions.

Speaking after the verdict, Lliuya's lawyer Roda Verheyen said that although the court had not recognized the risk to her client's home, the ruling was a "milestone" that would "give a tailwind to climate lawsuits against fossil fuel companies."

"The judgment that we've just heard means that every community and every person that is affected by climate change today can look at large emitters to take a responsibility, legal responsibility, and it is an immense historic shifting of the dial that's happened today," she told DW.

The environmental NGO Germanwatch, which has supported the plaintiff throughout the long legal proceedings, said the ruling marked "a great success."

"The court's decision, which at first glance sounds like a defeat due to the dismissal of the case, is actually a historic landmark ruling that can be invoked by those affected in many places around the world," the nonprofit said in a statement.

"This is because there are very similar legal requirements in numerous other countries, such as the UK, the Netherlands, the USA and Japan."

A long road of litigation

It's been almost a decade since Saul Luciano Lliuya first filed a lawsuit against the German energy giant, calling on the company to pay its fair share to protect his home in Peru.

Lliuya's town of Huaraz is located in the west of the country, in a valley below the Palcacocha mountain lake. As greenhouse gas emissions have caused global temperatures to rise, glaciers in the region have been melting. 

The amount of water in the lake above Lliuya's home has increased more than fourfold since 2003 alone, leading experts to warn of an increased risk of flooding, with potentially dire consequences for the region. They say if large blocks of ice were to break off the glacier and fall into the lake, it could trigger meter-high flooding in lower-lying urban areas.

Lliuya has been suing RWE under a German neighborhood law, which works to protect residents from disturbances resulting from the actions of their neighbors — for example, from tree roots causing damage from an adjacent property. His initial lawsuit was rejected in 2015 by a court in Essen, the western German city where the energy company is headquartered.

But in 2017, a higher court in the nearby city of Hamm granted an appeal. In March this year, judges at that court heard evidence over whether Lliuya's house was really in jeopardy and whether RWE can be held responsible. 

The Peruvian farmer, who earlier this year told DW the case was about "holding those who have caused the damage to account," was calling on RWE to cover a pro rata percentage of the estimated costs to build flood defenses to protect his home from the rising lake water. This would equate to around €17,000 ($19,000).

RWE, which is not active in Peru, said it has always complied with national legal regulations and has repeatedly questioned why it has been singled out.

In a statement after the ruling, the energy giant said it had always considered such civil "climate liability" to be inadmissible under German law. "It would have unforeseeable consequences for Germany as an industrial location, because ultimately claims could be asserted against any German company anywhere in the world for damage caused by climate change." 

However, Lliuya's lawyer said her client's problem was not going away.

"The risk from the Palcacocha Glacier Lake and from glacial lakes all over the world actually is still there and the global community and everybody needs to do something about it because we can't just have people living in such danger zones," Verheyen told DW.

Corporate responsibility for global emissions?

As an energy powerhouse with a history of largely using coal to generate electricity, RWE is one of Europe's biggest polluters. A 2023 analysis found the company to be responsible for just under 0.4% of global emissions — more than twice that of Greece.

In ruling the case as admissible in an earlier hearing, experts saw the court as effectively recognizing the transboundary effects of climate change — even if the damage occurs thousands of kilometers away.

"Some of the arguments made in the case are of course transferable, even if not directly applicable in any other jurisdiction," said Petra Minnerop, a professor of international law at Durham University in the UK. 

"And this is what we see in litigation generally that litigants have tried to transfer the arguments and also learn from the court outcomes and then provided improved evidence and the adjusted legal argument," she added.

Could it still set a precedent?

Since the RWE proceedings began, Noah Walker-Crawford, a research fellow at the London-based Grantham Research Institute on Climate Change and the Environment, said around 40 cases have sprung up. They are challenging big companies over their responsibility for climate change in countries such as Belgium, Indonesia and the United States.

"There has been insufficient political progress on climate change over the past decades, especially at an international level and especially in terms of loss and damage, in terms of the devastating impacts that communities are facing around the world, and that's why we're seeing more and more that communities are turning to the courts, really out of desperation," he explained.

Sebastien Duyck, senior attorney with the Center for International Environmental Law, said the judgement shatters the "wall of impunity for major polluters."

He added that "this precedent provides a legal spark to accelerate the pursuit of climate justice. The recognition that a company can, in principle, be held accountable in court for climate harms halfway across the planet will buttress the arguments presented in dozens of pending cases as well as embolden impacted communities to seek justice through the courts."

Edited by: Tamsin Walker

This article has been updated to include comment from the plaintiff's lawyer and from RWE.

Correction, May 29, 2025: An earlier version of this article misspelled the name of Saul Luciano Lliuya. DW apologizes for the error.