Current trends in ESG litigation in Poland

Alicja Adamczyk
Kubas Kos Galkowski, Krakow

In Poland, legal rules specifically designed for the initiation and conduct of litigation related to sustainability factors, as we know them today, have not yet been introduced into legislation. However, these factors are to a certain extent protected by the provisions of other branches of law (on which EU law has a great influence, as Poland is bound to EU law).

In terms of corporate governance, the Commercial Code, in particular, provides various legal instruments that may be considered ESG related. For example, a shareholder may sue the company to annul a corporate resolution if it is inconsistent with the company’s articles of association or good practices and negatively affects the company’s business or is intended to harm the shareholder. This remedy has a very broad scope and can be used in cases of corporate malpractice, including hostile takeovers.

Therefore, although ESG is not currently referred to in case law using this particular nomenclature, there are indications of how market participants should act to realise the values that guide ESG. In particular, the jurisprudence developed on the basis of the Commercial Code has for years referred to the need to respect corporate governance (including respect for shareholders' corporate rights), the obligation to maintain an appropriate balance between the company’s bodies, or the duty to act in accordance with good practice and the principles of community life, which covers a wide range of breaches of corporate culture. Furthermore, by the Act of 8 March 8 2013 on the Prevention of Excessive Delays in Commercial Transactions, Poland implemented Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions, which protects micro, small and medium-sized entrepreneurs from abuse by large entrepreneurs. It has already been considered in Polish jurisprudence and has had an important influence on the formation of relationships between market players.

A similar situation exists in the area of social responsibility, which is legally anchored, especially in the Labour Code (implementing notably Directive (EU) 2019/1158 on work-life balance for parents and carers and Directive (EU) 2019/1152 on transparent and predictable working conditions in the European Union). However, in this area, the influence of EU regulations on case law is clear. For example, on 24 April 2023, the District Court for the Capital City of Warsaw in the case J.K. v. Telewizja Polska S.A. (XV GC 1965/19) found that the plaintiff had been dismissed from work for homophobic reasons and awarded him compensation. Before entering judgment, the court requested a preliminary ruling from the Court of Justice of the European Union on the interpretation of EU law regarding equal treatment in employment and occupation.

Therefore, the recent EU regulations on ESG reporting may have a twofold impact. On the one hand, by raising awareness of ESG issues, they may lead to new litigation related to it, and on the other hand, they may reduce the number of related lawsuits due to the need to adapt business practices to the changing legal reality because of reporting.