A deli closed due to the coronavirus outbreak in Brooklyn, N.Y., March 26, 2020. (Stephen Yang/Reuters)
There are plenty of ways to give litigation-wary businesses and institutions the reassurance they need to reopen, though none of them is perfect.
What will it take to reopen the U.S. economy and civil society? One obstacle that may stand in the way is the fear of lawsuits. State legislatures and Congress should act now to limit the threat of lawsuits so as to encourage economically and socially necessary activities that are bound to carry some risks. Doing so is a legitimate exercise of the power to make laws that allocate liability and decide what kinds of commerce, schooling, and public gatherings can proceed without government interference.
Defensive Lawyering
The chief reason to act in advance to head off civil lawsuits is to avoid the danger that businesses, schools, and other institutions will be excessively cautious and risk-averse in reopening when it is in society’s interests for them to do so. Right now, many institutions are shut down by direct order of the government; others closed voluntarily before government orders were issued, or have closed without being required to do so. Eventually, government restrictions will relax, and that will leave business leaders, school administrators, church leaders, sports-team owners, and others with decisions about when it is safe to open up again. Most of them, however, will be told by the government what they can do, not what they should do.
In making that decision, they are almost certainly going to talk to their lawyers and worry about legal risk. They will be told that they have some defenses, particularly if they can claim they were relying on the guidance of government leaders and public-health experts. Public schools may have additional defenses based on their status as government entities. Cruise ships are protected by federal laws limiting certain liabilities for deaths on the high seas. Still, uncertainty will linger. Small businesses such as barber shops and nail salons are less likely to have lawyers handy for consultation.
Consider the colleges. Cal State Fullerton has announced that it plans to go to online-only classes for the Fall 2020 semester. Harvard is still publicly mulling the same step. When Harvard sneezes, the university system catches a cold; it was Harvard’s closure that triggered the domino effect that closed most of Massachusetts’s colleges and universities within days. If you’re a lawyer for a California or Massachusetts college, do you want to be defending a lawsuit over reopening the college’s campus when there are other schools in your area saying they don’t think it is safe to reopen? Decisions should be based on the circumstances: A small, isolated, rural campus such as Williams College, in western Massachusetts, presents a very different calculus than an urban campus such as Boston-based Northeastern, which is heavily integrated into the surrounding business community. But in a lawsuit, plaintiffs’ lawyers would argue that the standard of care is set by peer institutions.
What about factories? The outbreaks at Smithfield meat-packing plants led to charges that the company had not provided adequately for employee safety from the virus, and the plants have lately been shutting down despite being classified as essential food-producing businesses under state laws. For factories, plants, or shipping hubs, it is not unreasonable for the state to require some enhanced safety procedures during a pandemic. But social distancing will be impossible for a lot of factories without huge, expensive renovations or massive reductions in the workforce on duty.
The Lawsuits Have Already Started
The plaintiffs’ bar is already circling workplaces and schools; two class-action firms have announced that they are forming a 30-lawyer “Coronavirus Litigation Task Force.” Some suits have focused narrowly on businesses and schools that closed without providing refunds to customers. Drexel and the University of Miami have been sued for providing allegedly inadequate remote instruction. Uber and Lfyt have been sued in California by workers claiming entitlement to sick pay. Producers of protective gear have faced lawsuits for alleged product defects. Target has been sued by people claiming that hand sanitizer does not kill the virus. Some of these types of suits may be justified, while others are frivolous. None of them deters the reopening of the economy.
Others, however, do. Cruise ships have faced suits for failing to adequately disclose whether previous passengers got sick, or for claims that they contributed to outbreaks by sailing. Nurses have sued hospitals for not providing adequate gear. A wrongful-death suit brought against Walmart by the family of an overnight stock and warehouse employee alleges that the company “failed to clean and sterilize the store [where the employee worked] properly, failed to promote and enforce social distancing guidelines, failed to provide personal protective equipment (PPE), and failed to address the health concerns of employees with COVID-19 symptoms and warn other workers.”
Safe Harbors
There is precedent for a legislative response to this problem. The National Childhood Vaccine Injury Act protects vaccine manufacturers from liability in order to encourage vaccine research, while providing a compensation system for people injured by vaccines. Gun manufacturers are protected from liability for shootings, on the basis of a legislative judgment that the blame for misuse of guns lies with the shooter. A variety of other laws offer safe harbors to protect businesses that comply with certain requirements or receive federal regulatory approvals. Some would object that this is government interference, but any lawsuit is government action; the only question is whether the rule of law being applied is made by a legislature or by a court. A more serious structural concern is federalism. A congressional response would be best limited to interstate operations or businesses of national scale. Most lawsuits would be filed under state laws in state courts, so the first line of defense for most of the economy should be state legislatures.
Lawsuit protection need not completely abolish lawsuits or legal safeguards. There are five ways to provide protection and guidance for decisions to reopen. The strongest protection would be an absolute bar of the sort given to vaccine makers, possibly coupled (as in that case) with a public fund for compensating those who get sick as a result. The second approach would be a rule-based safe harbor protecting any institution that follows a specific, measurable list of safety precautions from being sued. The third approach would create a permission-based safe harbor that protects any workplace that gets a green light to reopen from government authorities, perhaps after an inspection. The fourth, narrowest approach would be the creation of rules limiting the evidence that could be used against defendants (e.g. preventing the use of evidence that a neighboring school made a different choice). The fifth approach would be to eliminate certain categories of damages (e.g. barring people from suing over fear of infection or infections that did not lead to serious illness). Whatever path is taken, the key will be making the protection afforded clear enough that it can be planned around, and ensuring that it does not require extensive litigation before it kicks in.
There is no one, perfect answer; any approach to limiting lawsuits will involve a balance of interests. More lawsuit protection means more and faster reopenings, but also reduces incentives for workplaces to protect workers and customers from infection. Given the enormous economic and social importance of getting America back to work, however, the rules for filing such lawsuits should not be left to the courts to work out after the fact, with businesses stuck guessing what will happen and possibly overcompensating by staying closed. Lawmakers should lead the way.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
