Trump is Right: This One Thing Should be In the Next Stimulus
Even Broken Clocks are Right Twice a Day
|May 19, 2020|
While we are gradually working the country into reopening, it has become clear that the economic impact of the virus/shutdown has been more severe than initially expected. Democrats are cooking up a new stimulus bill to help ease the country on the path toward economic recovery. Republicans, however, including Donald Trump, have insisted that the stimulus include one provision that Democrats consider to be a non-starter: immunity for businesses against Covid-19 lawsuits. While I am rarely in agreement with Donald Trump (as much is evident from my prior writings) I do believe that he is absolutely correct on this one. I’ll explain why.
While ostensibly the Judicial system holds that everyone, including businesses, are innocent until proven guilty, the reality is much murkier. In the real world, plaintiffs, backed by attorneys, often have the upper hand, placing businesses in a bind. Plaintiffs are free to make any accusation or claim that they like and plaintiff attorneys will often represent them for free (in exchange for 30% of the settlement). For an accuser/plaintiff, there really is no risk or downside to making a claim. Businesses, on the other hand, as defendants, are forced the weigh the risk of the cost of defense against simply paying settlements.
As an example, imagine Joe’s Floral reopens in mid July after months of losing money during the lock-down. In the pursuit of safety, Joe the owner, only allows two customers in the store at one time. He wears a mask all day, and cleans the shop on a regular schedule to protect his customers. The first two customers of the day arrive. Customer A, is wearing a mask, Customer B is not. Five days later, Customer A calls Joe and claims that she fell ill with Covid-19, and she thought that she heard him coughing. Further, she blames Joe for allowing Customer B to enter the store without a mask . Soon after, Customer A retains an attorney who accuses Joe‘s Floral of negligence that ultimately led to Customer A’s illness. They proceed to sue for the resulting wage loss, medical bills, and pain and suffering.
Now, Joe didn’t do anything wrong necessarily. He took the measures that he could without being oppressive to his own customers and turning them away at the door. Furthermore, the plaintiff cannot “prove” that she got the virus from his store, and in all probability she likely got it somewhere else. But it doesn’t matter. Joe’s insurance doesn’t cover viruses or bacterial infection (most don’t) and so he is personally faced with a choice, risk spending $30,000+ on an attorney to defend the case and possibly win, or settle now for $9,000. For Joe, the choice is clear, a settlement is the less risky option.
If the government fails to put in place immunity for businesses, they potentially face an onslaught of meritless lawsuits that add further pressure to them at a time when they are most fragile. This is precisely what the economy does not need right now.
Democrats argue that giving businesses immunity from lawsuits might make them careless and disregard the public interest, leading to more infections and a worsening of this health crises. This is not the case. Well crafted legislation would give businesses immunity in all cases except gross negligence. Such legislation would protect the general public in ensuring that companies take reasonable measures to protect them, but would not leave all businesses open to lawsuits that might jeopardize their survival as well.