A leading expert on lawsuit abuse says the U.S. Congress must act quickly to adopt reforms to protect businesses from excessive litigation as society starts to reopen.
One of the biggest fears businesses have right now is that they will be the target of lawsuits related to COVID-19, Harold Kim, president of the U.S. Chamber of Commerce Institute for Legal Reform told Chamber Business News.
“I’ve been doing legal reform for nearly 20 years now and I have never seen a groundswell of concern about the liabilities that are going to emerge out of the coronavirus outbreak,” said Kim, who is recognized as a leader in helping to reshape the nation’s litigation climate.
“It doesn’t really matter if you are a Fortune 500 business or a coffee shop in downtown Phoenix,” he said. “These are real issues and the fear and the concern and the cloud of liability is something that policymakers in Washington — but also throughout the country — are taking a really close look at because it’s a huge, huge issue as the country starts to reopen and restarts the economy moving forward.”
Protections needed coast-to-coast
Litigation reforms are needed to address the unique challenges of COVID-19, said Kim, who applauded Arizona and other states that have passed measures or are moving forward to adopt similar laws to protect industry. On Monday, the Arizona House Rules Committee approved the introduction of a bill to provide protections for businesses and organizations that follow safety guidelines to prevent outbreaks of the disease.
The best way to move forward is an “all hands on deck” approach to the problem with both the federal government and state legislatures enacting protections to assure liability concerns are covered coast-to-coast, Kim said.
Liability reforms, however, would not protect companies or employers that engage in recklessness or wilful or gross negligence involving COVID-19, he said.
“We are encouraging Congress to enact at the federal level a safe harbor for companies to receive liability protections if they follow the CDC and/or state or local guidance when it comes to social distancing; when it comes to protective equipment,” he said. “And it’s important for companies and businesses, and even churches, and childrens’ care centers, and charities, that they know what the standard of care is in moving forward.
“If you have that standard of care then you should not be subject to a negligence lawsuit.”
Four critical areas for protection
The Institute is recommending four areas for protection in the next federal stimulus package:
As businesses open up, they are vulnerable to lawsuits from customers and employees who may claim they did not take reasonable precautions to safeguard against the virus. Businesses that follow state and federal guidelines for protections would be shielded from these kinds of claims.
Manufacturers and other businesses that have been taking measures to help fight COVID-19 including producing personal protection equipment (PPE) and hand sanitizers. Individuals or companies who voluntarily provide PPE also would be protected.
Front line medical workers who care for coronavirus patients.
Securities class action lawsuits
Companies that had to take actions in response to the coronavirus would be shielded from class action lawsuits claiming those actions caused stocks prices to drop.
“The things we’re focused on doing in Washington is to look for reforms that are timely because it’s got to happen quickly,” Kim said. “This can’t happen over the course of the next five years. It will be too late. They have to be targeted so that they’re narrow enough and tailored enough to address the solutions and they have to be temporary so that it responds to the COVID-19 crisis.”
Historically, Congress has come together as a bipartisan force to address liability reform after other disasters and major events like 9/11 and Y2k, Kim said. Now, is the time for lawmakers to do it again.
Americans support protections against COVID-related lawsuits
Most Americans support the idea of protections for businesses, according to a national survey released this month by the Institute for Legal Reform. A coalition of Republican, Democrat and Independent voters were polled for the survey.
More than six in 10 Americans believe that Congress should extend liability protections to employers.
Other findings reveal that:
-84 percent of Americans believe essential businesses like grocery stores and pharmacies need protection from lawsuits related to the coronavirus
-82 percent believe that — aside from cases of gross negligence — employers who follow public health guidelines to protect their onsite customers should be shielded from exposure lawsuits
-75 percent agree that makers of hand sanitizers and other cleaning products should be protected as well
Safety guidelines protect businesses and consumers
It’s clear that many Americans support these kinds of protections as long as businesses act responsibly and follow guidelines laid out by the CDC and the states, said Glenn Hamer, president and CEO of the Arizona Chamber of Commerce and Industry.
“If this is done right, this is part of the solution in terms of not just economic health but physical health. By bringing that safe harbor and encouraging good behavior you’re going to have safer workplaces and safer places for customers to visit.”