Liability Protection Is a Piece of the Back-to-Work Puzzle

By Harold Kim

The stories from emergency rooms and intensive care wards across the nation are terrifying and inspiring at the same time. Thousands of doctors, nurses, and volunteers are caring for COVID-19 patients with inadequate supplies and barely enough rest to make it through their busy days.

Right now, health care workers need to save lives, not worry about future lawsuits. That’s why governors in at least seven states have followed the urging of U.S. Health and Human Services Secretary Alex Azar to issue executive orders protecting hospitals and medical professionals against liability suits over injuries related to the pandemic.

New York Gov. Andrew Cuomo recognized the need on March 23. Since then governors in Connecticut, Illinois, Indiana, Michigan, Mississippi, and New Jersey have signed similar executive orders. Other states are following almost daily.

These orders are based on sound public policy and come as a bipartisan Congress included similar protections in the CARES Act, which President Trump signed into law on March 27. Even in today’s divided political world, leaders on both sides of the aisle are getting the message: Limiting litigation abuse is essential to the economic stability and recovery effort.

As much as liability protections are needed now, they will be even more necessary in the coming months, as businesses reopen and start surveying their financial wreckage. The last thing they need is the hanging cloud of liability and risk. Recently, the U.S. Chamber Institute for Legal Reform released a report that outlines the different ways businesses may be vulnerable to litigation because of the virus. No one will be spared from that threat, from grocery stores and restaurants to furniture stores and other big-box retailers, to manufacturers, farmers, and even homeowners.

Lawmakers should act quickly to pass liability protections to ensure our nation’s economic recovery. There’s little time to waste.

Already, trial lawyers in Florida, Ohio, and Tennessee are airing aids for COVID-related lawsuits. Lawsuit marketers are soliciting law firms to take advantage of cheap ad buys. Even litigation funders­­ — the group that takes a cut of settlements in exchange for financing lawsuits — are touting their services.

There’s precedent for Congress to pass broad liability protections. The Y2K Act enacted a three-year ban on most lawsuits in state and federal courts over economic losses associated with Y2K glitches. Post-9/11, Congress ensured victims were compensated and curtailed needless, court-clogging lawsuits through the 9/11 Victims Compensation Fund. Later, Congress passed the SAFETY Act to guarantee liability protections for technology companies helping in the fight against terror.

Every one of those historic laws passed with strong bipartisan support because lawmakers recognized that the temptation by some in the plaintiffs’ bar to benefit from economic crises is too great to ignore.

The steps taken by Congress and some governors this time are no exception. So far, these actions are aimed at protecting health care workers from excessive litigation and contain sensible exceptions for gross negligence or unlawful acts.

The nation can barely afford its expensive, inefficient, and unfair tort system when the economy is healthy. Research shows that $429 billion was paid into the U.S. tort system in 2016, with only 57 cents of every dollar going to plaintiffs. And those lawsuits occurred in good times when the economy was strong. Lawsuits after the COVID-19 crisis will occur in a weakened economic state.

Over the past few weeks, many businesses have played crucial roles in helping communities across the country. Certainly, there will be some who will behave less magnanimously. Bad behavior should not be rewarded, and liability protections should never be a blanket license for bad behavior.

American businesses are working as hard as possible to get back to normal. The return to work and normal life is going to take time, patience, perseverance, and planning. That’s why the U.S. Chamber of Commerce recently launched Path Forward, an initiative to address how Americans and businesses can return to work safely, successfully, and sustainably. Liability protection is a key component of the many considerations of this larger plan. Companies need the assurance that they can resume normal operations without trial lawyers knocking on their doors.

Congress and state officials will need to keep the trial bar at bay for our nation’s recovery in the days, weeks, and years to come.

Harold Kim is the president of the U.S. Chamber Institute for Legal Reform.