COVID-19 Business Interruption Litigation

COVID-19 Business Interruption Litigation Surges

COVID-19 business interruption lawsuits surge – ATRA warns the civil justice system doesn’t exist to perform the functions of legislators, regulators or public health experts.

As of July 23, 2020, at least 3,727 lawsuits have been filed related to the COVID-19 pandemic. Of those lawsuits, more than 1,000 involve contract disputes and insurance claims. With the end of the pandemic still nowhere in sight, the number is expected to significantly rise over the coming months. Plaintiffs’ lawyers across the country are pouring millions of dollars into advertising with hopes of drumming up new business. They spent $67 million between January and May of this year on mass tort TV advertising, a 6.6% increase from the same time last year when the time slots were more expensive.

John Houghtaling II, a prominent New Orleans plaintiffs’ attorney, is leading the charge for business interruption litigation. He has filed lawsuits across the country representing a variety of business owners arguing that most insurance policies should remunerate policyholders, regardless of policy exclusions. Insurers argue that most business interruption policies generally only cover physical damage, not virus contamination. Insurance companies have warned that forcing insurers to cover all COVID-19 business interruption claims would bankrupt the industry.

As the country continues to grapple with solutions, both health and economic, one thing is for certain – a flood of litigation is not the answer. Entrepreneurial plaintiffs’ lawyers should not be permitted to profit off of COVID-19. Serious public health crises, like the devastating COVID-19 epidemic, require a comprehensive national solution. Our civil justice system exists to resolve disputes—not to perform the functions of legislators, regulators and the public health community. Broader public policy challenges should be addressed by those entrusted with such responsibilities. This includes Congress, state legislators and federal and state public health officials and regulators. They are obliged to serve and protect the public, and they are accountable to us all.

To that end, Congress is currently considering multiple proposals that would have the federal government shoulder some of the burden and risk involved for insurers, while at the same time provide relief for businesses. Whether the legislative solution that emerges from Congress “will solve” the problem remains to be seen. But this is the right way for our country to address this critical national issue. Let’s not leave this to the courts – and the lawyers.