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Business liability protection is critical for economic recovery

Business liability protection is critical for economic recovery
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The coronavirus has taken a sledge hammer to the strongest economy in history. Businesses across the country have been closed by government policy to mitigate the spread of the disease, leaving grocery stores and pharmacies open to the public. As the country slowly starts to reopen, businesses now face the uncertainty of coronavirus lawsuits.

As our economy struggles to stand up and walk forward, we cannot allow frivolous lawsuits to kick us back into the dirt. Companies are doing the best they can to keep both customers and employees safe by following guidance that seems to change every day. Businesses are struggling to make ends meet and pay their employees, and employers are worried about having to close down forever if the pandemic continues.

It is clear that businesses are in this untenable situation through no fault of their own. The coronavirus is a global health crisis that has completely disrupted everyday life. Your local grocery store or gas station should not be held liable for doing the best they can to serve their communities. But where Americans see this as a tragedy, trial lawyers see an opportunity to cash in by shaking down vulnerable businesses with frivolous torts. Under current law, reopening the economy in the midst of a global health crisis will create a number of serious liability risks for businesses.

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One area of liability is exposure, where trial lawyers will claim their clients caught the coronavirus at a specific location as a result of negligence by a company. It is virtually impossible for anyone to prove where they caught any illness. But exposure claims will begin a costly and drawn out process that could drive many businesses and industries to bankruptcy. Even silly lawsuits can cost them millions of dollars to defend against.

Trial lawyers can also go after employers for laying off their workers as a result of mandated closures. This means employers would be held liable for a decision they were forced to make because of the reaction of their own government to the global health crisis. These avenues for predatory litigation only add to the tremendous burden that employers face today during this crisis. So in order to protect companies and small businesses from these scenarios, Congress needs to urgently add liability protection for businesses in any future federal coronavirus legislation.

The concept behind liability protection is simple. If companies have taken reasonable steps to keep customers and employees safe, they should be protected from greedy trial lawyers looking to cash in on the crisis. Since the government mandated the closure of most businesses to mitigate the spread of the disease, the government has a clear responsibility to protect companies from such negative consequences of reopening.

If trial lawyers are allowed to proceed with their greedy agenda, that will undermine the ability of businesses to carry out basic functions. Frontline workers are already second guessing themselves as trial lawyers mobilize to shake down their industries. Doctors and nurses are now worried about legal ramifications of making difficult but necessary health care decisions. Workers in hospitals and in nursing homes are also afraid that trial lawyers will swarm to attack the quality of all their care in courtrooms.

Failing to enact liability protection will also complicate the reopening of nonessential businesses and further slow the recovery. States are already beginning to gradually ease their social distancing requirements to pave the way for a return to normal life. Businesses like bars, gyms, salons, and restaurants will soon have to make plans to reopen that involve following guidelines to keep customers and employees safe. These businesses may decide to remain permanently closed if the prospect of reopening could bring on an expensive lawsuit that could take years to resolve.

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Fortunately, officials are adamant about including liability protections with the potential phase four of coronavirus legislation. Senate Majority Leader Mitch McConnell has now drawn a “red line” over liability protections and will insist that the provision is included in future relief packages. National Economic Council Director Larry Kudlow has said that businesses should not have to deal with any “trial lawyers putting on false lawsuits.”

As our national focus turns toward restarting the economy, policymakers should enact proposals that encourage businesses to reopen as safely as possible. Protecting businesses from frivolous coronavirus lawsuits is part of that effort and needs to be included in future relief packages.

Grover Norquist is president of Americans for Tax Reform in Washington.