COVID-19 has revolutionized our lives and created complications for every industry. The practice of law is no exception. Problems prompted by the virus will undoubtedly increase the incidence of liability lawsuits directed toward a wide range of businesses and services. While it's too soon to anticipate all the ways in which the effect of this coronavirus will prompt legal action. The following are some guidelines regarding what may be anticipated.
Many business insurance policies provide business interruption insurance. But never in recent years, has a situation of this type and scale occurred; with mass business closings made necessary, simultaneously, due to viral outbreaks within companies, or mandated by government entities as preventive measures. Insurance companies and businesses are working to determine whether such situations create valid claims.
Campus closings and the transition to exclusively online learning create a basis for disputes with students and families. At some institutions, requests are being received for refunds of payment made for tuition, room, and board. Further issues may arise in time.
Event venues are being asked to return payment for weddings, graduations, varied gatherings canceled due to restrictions on these types of celebrations. Minor and major sporting events for which tickets were pre-sold, gyms, and other facilities to which members had no access during forced shutdowns face similar disputes.
As we enter the "new normal" following forced shutdowns to prevent the spread of COVID-19, courts will fully reopen, accepting a broader range of cases. Breach of contract lawsuits will likely multiply. Parties may rely on force majeure (commonly understood as "act of God"; an unavoidable condition which made proper action impossible), or similar clauses to defend non-performance.
Contract language and the specific theories and practices of the legal system in the community where the case regarding these clauses is held, will determine the outcome. Whether the pandemic, and/or orders made to protect the public was responsible for the breach or whether the business would be considered at fault if the breach occurred under normal economic and social circumstances will determine outcomes. Business contracts with serious implications may require complex litigation.
In times of crisis, a panicked public and heightened demand for products is a recipe for profiteering. Claims for price gouging are already occurring for medical gear and sanitation products.
False advertising and deceptive marketing claims are expected for products falsely purported to prevent or cure the virus, as well as misleading claims of safety and efficacy.
Lease agreements will be under scrutiny, with many disputes not covered under existing contracts, in this new reality as we've never known it. Rulings must be made on whether businesses have access to property, and at what cost, while they are closed due to government mandated shutdowns.
As time passes and business viability remains uncertain, disputes due to financial hardships, re-negotiations, foreclosures, bankruptcy filings will likely multiply.
## Financial and Securities Industries
The stock market has been remarkably volatile since the start of the pandemic. This volatility makes securities fraud litigation likely, especially regarding the neglect of various companies to make clear the impact of COVID-19 on their business.
Companies making false claims in an attempt to cash in on consumer fears during the pandemic are at risk, as are companies who did well simply because their products were naturally in demand due to consumer needs. Defects in products or services exposed by high demand may have been known to the company previously, the information not released to the public. Zoom and its vulnerabilities and security risks is a prominent, prime example.
Banks face litigation over loan defaults, as businesses and consumers face pandemic related income loss. They also face class action suits regarding their handling of funds from federally directed programs.
All medical facilities face significant risk, related to the spread and treatment of this coronavirus. Safety of facilities, preventive measures, compliance with guidelines, handling of information, lack of sufficient protective equipment, issues regarding billing, are just some potential categories, infractions of which patients, families, staff, other entities may seek reimbursement. Disputes involving suppliers and providers may also be expected.
Unprecedented complications have occurred in all sectors of society due to the COVID-19 crisis. The legal system stands ready to negotiate fair resolutions where uncertainties exist.
The blog posts provided on this website do not, and are not intended to, constitute legal advice; instead, all information, content, and materials available on this blog are for general informational purposes only.