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Companies fear coronavirus liability lawsuits. So far, few exist

Princess Cruise Lines

(Reuters) – Businesses are urging U.S. lawmakers to shield companies from what they fear could be a flood of lawsuits by workers and consumers blaming employers for exposing them to the new coronavirus.

But so far, court records show few such cases have been filed and some legal experts say the threat of liability is exaggerated because of the difficulty of proving where someone was infected.

“Those cases haven’t materialized, and I doubt they will,” David Vladeck, who teaches civil procedure at the Georgetown University Law Center, said on Tuesday at a U.S. Senate Judiciary Committee hearing on a liability shield for businesses.

As of Wednesday, only 45 of 1,018 coronavirus-related lawsuits were personal injury or medical malpractice cases against a business, the areas of most concern for trade groups. The analysis was based on a case tracker by the Hunton Andrews Kurth law firm.

Of the 45 cases, 28 were against Princess Cruise Lines. The rest were against three other cruise lines, two meat processing companies, Walmart Inc., a senior living facility operator, two care centers, a hospital and a doctor’s group.

Congress appeared to be heading for a legislative standoff this week with Democrats demanding another stimulus package to help support a shattered economy and Republicans pushing to protect businesses from lawsuits.

Senate Majority Leader Mitch McConnell said he wanted to “make sure opportunistic trial lawyers are not lurking on the sidewalk outside every small business in America, waiting to slap them with a lawsuit the instant they turn the lights back on.”

The U.S. Chamber of Commerce and retail and leisure trade groups told Congress that the novel coronavirus and the patchwork of evolving health guidance from state and local authorities created legal uncertainty for companies.

Some state and local governments have eased restrictions imposed to combat the spread of the virus, which has infected more than 1.4 million people and led to at least 85,000 deaths in the United States, according to a Reuters tally.

A liability shield would give businesses the confidence to reopen without the looming threat of lawsuits by customers or employees who get COVID-19, the disease caused by the coronavirus. Protections would not be available for companies guilty of gross negligence, recklessness or willful misconduct.

Consumer groups have argued that current law provides adequate protection for businesses that act in good faith.

Removing the threat of liability would discourage Americans from returning to work, dining out and resuming other activities, the consumer groups said.

Since the first case related to coronavirus was filed on March 9, the vast majority of the lawsuits filed in state and federal courts are unrelated to someone suing a business for COVID-19 exposure, according to the case tracker.

About a third of the cases filed have been brought by prisoners seeking release from a coronavirus-hit facility. Hundreds more have been brought by businesses, mostly over insurance coverage or contracts.

There are 197 class actions, largely brought by consumers, stemming from disputes over insurance, lending, tuition and ticket refunds.

“The idea of a mountain of liability is grossly exaggerated,” said Paul Bland, the executive director of Public Justice, a litigation advocacy group.

Harold Kim, president of the U.S. Chamber Institute for Legal Reform, said that surveys have shown businesses are worried about lawsuits and the number of cases is rising.

“Enacting targeted and temporary liability protections for these businesses shouldn't depend on how many lawsuits are filed right now,” Mr. Kim said.

Remington Gregg of the consumer advocacy group Public Citizen said he doubts that consumer litigation will increase sharply when the economy reopens.

Proving that a person was exposed at work or a business, rather than during their commute or grocery shopping, is legally difficult.

“Lawyers don’t want to take losing cases and lawyers know how difficult it is to prove these claims,” Mr. Gregg said.

More insurance and risk management news on the coronavirus crisis here