Without liability protection, COVID lawsuits will devastate small business

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NFIB,

The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, issued a set of Liability Protection Principles, intended to protect small businesses from the threat of unfounded lawsuits as they begin to reopen. An NFIB survey released this week showed that nearly 70% of small business owners are concerned about liability claims increases, while only 6% are not at all concerned.

“As small business owners across America begin the process of reopening, it’s imperative that we establish protections from the threat of lawsuits that exploit the already damaging effects of COVID-19,” said Karen Harned, Executive Director of the NFIB Small Business Legal Center. “According to a recent NFIB survey, nearly 70% of small business owners are concerned about increases in liability claims when reopening their businesses. We urge Congress to address these Liability Protection Principles so that our nation’s small businesses who have fought to survive over the course of this pandemic can get back to work without fear of costly legal battles.”

Below is NFIB’s set of Liability Protection Principles designed to address the legal issues of most concern to small business and which should be addressed in any legislation Congress passes.

1. The Workers Compensation system should be the exclusive vehicle employees who suffer serious physical injury from COVID-19 at work use to adjudicate their claims.The workers compensation systems developed in each State are best-situated for determining whether a worker contracted COVID-19 at work and is eligible for compensation as a result.

NFIB recommends that Congress specifically provide that employer liability for physical injury due to COVID-19 be adjudicated under state workers compensation laws to the extent such liability exists. No separate federal or state tort liability should be permitted for employee injury claims due to the virus.

2. Businesses should be protected from liability to customers and other third-parties unless those customers or parties prove the business knowingly failed to develop and implement a reasonable plan for reducing the risk of exposure to COVID-19 and that failure caused the injury.When reopening a business both the Occupational Safety and Health Administration and the Centers for Disease Control offer guidelines for keeping workplaces safe. In addition, state health departments may also have suggested procedures. These guidelines are instructive; however, they are often not legally binding and should not be used as a “get into court” free card for the unscrupulous trial attorney. Business owners should develop and implement plans to reduce the risk of COVID-19 exposure in the customer and third-party “facing” locations of their business.

NFIB recommends that business owners be shielded from liability from lawsuits brought by customers or other third parties unless the customer or third party proved that the business knowingly failed to develop and implement a reasonable plan to reduce the risk of COVID-19 by customers and other third parties and that the failure caused the injury.

3. Permitted lawsuits should be limited to persons who experience a serious physical injury due to COVID-19 resulting in hospitalization. Although there is still much to be learned about COVID-19, one thing scientists do know is that it affects different people in different ways. Indeed, we continue to hear of people who test positive for the virus but experience few if any symptoms.

NFIB recommends that Congress grant businesses immunity from coronavirus-related litigation except in cases of gross negligence that causes the plaintiff serious physical injury resulting in hospitalization or death. No claims for emotional injury due to contracting the virus should be permitted.

4. Fines should be imposed on unscrupulous trial attorneys bringing frivolous COVID-19-related lawsuits. Small business owners do not have in-house counsel and the vast majority cannot afford to hire lawyers to defend their business and reputations in court. Trial lawyers know this and, as a result, small business owners are easy targets for the plaintiff’s attorney looking for a quick payout. Trial attorneys should be penalized – not incentivized – for bringing a frivolous COVID-19-related lawsuit.

NFIB recommends that Congress impose sanctions on attorneys found to bring a frivolous COVID-19-related claim. In addition to sanctions, the plaintiff’s attorney should be required to pay the defendant’s attorneys’ fees and other costs relating to the litigation.