Liability concerns all business owners should carefully consider when re-opening a business in the "post" COVID-19 environment

“I can resist everything except temptation.”  -- Oscar Wilde

The airways are saturated with reports about whether the cure is worse than the disease, with an emphasis that to save the American way of life, it is time to get back to business.  Despite a recognition that COVID-19 will stay with us as we reopen, and the real probability that infection cases will rise, the pressure to start the return to “normal” is immense.  The bottom line is that everyone has quarantine fatigue, and everyone wants and needs businesses and the economy to reopen, as quickly and safely as possible.  We suggest you resist the temptation to reopen, until you have considered how to manage very real liability considerations.

Multiple state governments, tasked by the federal government to make the decisions around reopening, are hastily ignoring published federal guidelines established with data driven safety thresholds that prove a sustained downturn.  And, since the push to reopen is without specific or consistent guidance on an industry-by-industry basis, identifying precisely how to safely reopen has a potentially devastating impact – both economically and legally -- if things go wrong.

While business owners will naturally want to reopen their businesses as quickly and expansively as possible, especially given the green-light from the government, we’re raising important red flags to consider before doing so. It’s important that if you’re working to reopen your business, you plan ahead for risk management and liability considerations. We at Chaiken & Chaiken are engaging in this crisis management-oriented discussion, to heighten business owner awareness as they navigate the process of developing and implementing their re-opening strategies. 

Our society is prone to playing the blame game.

When things go wrong, something else or someone else must be at fault.  So, as a society, we are prone to quickly and aggressively play the blame game and promptly take action to hold someone accountable for decisions and wrongdoings.

We already know that the sudden closure of businesses and lives that we all have experienced has clearly led to disastrous consequences – economically, medically, psychologically, and in the area of interpersonal relationships. Litigation already is ramping up quickly to address the impacts of shutdown orders and the denials or lack of insurance coverage/governmental assistance to offset the losses that have been suffered.  More particularly and by way of example, 

• The state of Missouri filed a lawsuit against the Chinese government saying its response to the outbreak that emerged in the city of Wuhan had led to devastating economic losses in the state.
• Personal injury claims addressing failures to prevent or protect from infection, or to properly manage infection cases, are also already plentiful nationwide. 
• Class action lawsuits against insurance companies who have refused to provide business interruption insurance benefits to business owners, are becoming commonplace nationwide.  

Additionally, in the face of widespread payment defaults, desperate creditors are scrambling to be first in the payment line, while their hamstrung borrowers continue to endure declining revenue, and lack of capital to pay their debts because of the impact of the valid and necessary response to the pandemic. Government assistance has not been available as planned or hoped for.  Complaints about the rapid absorption of the assistance money by those with means and relationships to fast track access, at the expense of those who truly needed the relief but lacked such access, are plentiful, and so are the lawsuits on behalf of those who were unable to secure the benefits they needed. Closer to home, families that paid full tuition dollars for a “complete’, on-campus university experience find themselves not only suffering economically due to their own loss or curtailment of income, they are desperate for tuition refunds or future credits that universities – needing the already realized income -- are hesitant to give back.  Universities are now confronted with a most difficult choice -- reopen to provide full value, and risk an infection spread on campus and beyond, or stay closed, offering refunds to keep their students enrolled.

 

Reopening businesses and the economy could itself create a litigation pandemic, if we see a rise in infection cases and worse, severe illness or deaths.

As we travel through the uncharted process of reopening there is going to be a renewed, criminalization of the contagion itself and the decision-making associated with reopening.  Standing in a line to order food at a restaurant, once an ordinary experience, might reasonably become a scenario full of mistrust and suspicion. What should one think about those other customers, or workers, who are wearing masks?   Might they be an infection culprit? What if, a day or so after visiting a particular restaurant or business, one learns they have become infected? Are they going to blame someone?  Odds are they will try – especially where success in blaming leads to financial gain.  

You are not immune,  and can expect to face legal liability claims if your reopening strategy “leads” to blame for post-re-opening injuries or illnesses.

While during times of crisis, we all depend upon the government to protect, serve and assist; legally, they’re immune from legal liability if they are negligent in their decisions. Governmental entities and officials know that beyond the t.v. networks and voting booths, they face little accountability if their decisions cause harm, thus they are more likely to promote potentially unsafe activity, where it is politically expedient to do so. And while on a 24-7 basis, politically and journalistically, the blame game is in full swing (be it governmental decisions to order shut downs on a timely basis or failing to do so timely or at all,  failing to supply enough PPE or testing capability or access, or a general lack of providing meaningful reliable self-protection guidance) , politically and journalistically is where the government blame game ends.  

Most of us do not know that the law grants governmental entities complete or partial immunity from lawsuits, so that the availability to sue a governmental entity or official is either non-existent, or extremely limited, recovery-wise.  Accordingly, business owners and the public at large need to know and understand NOW that if the rush to reopen America turns out badly, the ability to hold governmental entities and officials accountable for their negligent decisions will be extremely limited.  The blame game and inevitable quest to hold someone accountable, will be directed at those who do not have liability immunity protections.

Unless legislation is passed that says otherwise, you will not be able to rely upon governmental authorizations to re-open to avoid liability if a claim is made against you by someone alleging that they got sick at your business, or because of something you did or did not do during the re-opening process to prevent their exposure.  

As more people enter your business premises, the rate of exposure to the virus could increase, as will the possibility of liability claims if someone believes they were exposed at your business.   

What does this mean for you and where can you turn for help?

Just because you can open, does not mean you should.  The experts have warned that many of the more immediate opens are premature, and they have made it foreseeable to all of us that early reopening can or will increase the rate of exposure to the virus, in an injurious manner.

If you reopen, and you suffer an incident that may give rise to a claim or multiple claims, your reopening decisions, actions and omissions will be evaluated under a negligence standard. The question will be whether you acted as a reasonably prudent business owner would have acted under the same or similar circumstances.  

The problem we all face is that we do not have reliable, consistent guidance on how to safely reopen, and we do not know how similarly situated business owners will act.  Some will stay closed.  Some will delay openings.  Some will implement specific social distancing and transmission spread controls that others will not. Some will have insurance coverage if they experience a claim. Insurance companies may, with increasing frequency, deny coverage for reopening related losses, if they believe the reopening happened too soon, or on a basis that is outside the scope of the business activities they agreed to insure.

Charged with an awareness that injury or illness is a consequence of reopening your business, we recommend that you carefully consider the timing of your reopening relative to the number of cases being reported, and their decline in your area.  There is a reason why Dr. Fauci and team have recommended that reopenings happen a certain amount of time after a sustained decline in reported cases.  We also recommend that you consult with industry associations to determine what, if any, specific recommendations they may be making about operation changes needed to ensure the safest experience possible in an effort to act consistently with the bulk of your industry. And finally, always monitor CDC guidelines and recommendations and those of your state and local health officials and adjust your operations as may reasonably be warranted.   

If you are concerned that it is too soon to safely re-open,  delay re-opening or modify and restrict the amount of exposure at your business until you feel more comfortable.  If you are overwhelmed in the re-opening process by a larger than expected rush of customers -- causing you to worry that exposure opportunities may be increasing beyond what you planned for,  cut off service to reduce the customer load.

These are complex considerations.  We all must proceed with caution.  If you have any questions or concerns about what to do or what not to do, you should consult with a qualified risk management, crisis management or legal advisor.

If you’d like to learn more or discuss what we at Chaiken & Chaiken Law can do to help, support, or advise, reach out to kchaiken@chaikenlaw.com to discuss further. Continue to stay safe and be well.