Blanket COVID-19 liability shield will cost taxpayers

Legal immunity won’t heal the economy or prevent harm, but it could end up making ordinary Americans pay

The coronavirus relief package unveiled by Senate Majority Leader Mitch McConnell and his GOP conference last month would make it more difficult to hold businesses responsible for gross negligence, Ellis writes.  (Caroline Brehman/CQ Roll Call file photo)
The coronavirus relief package unveiled by Senate Majority Leader Mitch McConnell and his GOP conference last month would make it more difficult to hold businesses responsible for gross negligence, Ellis writes. (Caroline Brehman/CQ Roll Call file photo)
Posted August 21, 2020 at 3:04pm

Senate Majority Leader Mitch McConnell has made a five-year “liability shield” a key demand in negotiations for the next COVID-19 relief legislation. As the country navigates uncharted waters of the pandemic, many types of businesses — nursing homes, retail and restaurants, and health care providers — could receive legislated protection from civil liability for harms (including deaths) their actions may or may not have caused. This news comes on the heels of a letter from 21 of the 26 Republican governors asking Congress to enact pandemic-related civil liability protections.

As a starting point, it is important to remember who is protected by immunity and who is harmed. Immunity from civil liability for negligence does not prevent harm or injury. It simply shifts the burden and costs to the person or group who has been injured — and all too often, to the taxpayer. The legal standard for negligence requires a plaintiff to prove four separate elements: duty of care, a breach of that duty, harm, and a causal connection between the harm and the breach of duty.

Each state has its own case law about what it takes to meet each element, but there are some key commonalities around “duty of care.” Businesses are responsible for taking reasonable care of their employees, customers and neighbors. It is a broad standard: Do we really want businesses that chose not to take reasonable care to suffer no consequences?

The HEALS Act package released by Senate Republicans last month would even make it more difficult to hold businesses responsible for gross negligence, or conduct with reckless disregard for the safety of others. Under the proposal, those reckless companies could defend themselves by saying they tried not to be reckless. Responsible businesses that choose to invest in the safety of their employees and customers may be undercut by competitors who find that going beyond that first effort is too expensive.

Eliminating liability takes away a critical tool for holding corporations accountable to the individuals putting themselves at risk to keep the economy moving. In the context of the spreading pandemic, establishing a causal relationship will be difficult — people could have contracted the virus almost anywhere, from anyone they encountered. Claims that COVID-19 will lead to unprecedented litigation are simply not supported by the facts. Of more than 4,100 COVID-19 related lawsuits filed, only 75 are for wrongful death or injury as a result of getting sick at work. Two-thirds fall into three categories — insurance disputes, prison cases and civil rights cases, including challenging shelter-in-place orders.

Even more absurd than the general coronavirus-related liability shield is the talk of adding other, unrelated immunity clauses to the relief bills. The oil and gas industry, for example, has been looking to avoid liability for the monumental climate harms and public costs their products have caused — even after they understood how harmful their product was to human health and the climate. One thing I have learned over 20 years as a budget watchdog is that once large legislation gets moving, all sorts of extraneous pieces try to catch a ride.

But finally, we can’t forget the potential burden on taxpayers. How is it that taxpayers get stuck with the bill when corporations are given immunity from liability? Because the costs do not disappear. What may seem like private losses — medical bills, lost wages, for example — trickle (or gush) down to state and federal taxpayers through increased unemployment insurance costs, Medicaid rolls and personal bankruptcies.

Insulating businesses from financial risk can also lead to more risky environments for workers, leading to more COVID-19 cases, more community spread, more possible disruptions and closures … and again, more taxpayer costs.

And the Senate’s version of the COVID-19 relief legislation would funnel liability lawsuits through the federal courts instead of the state courts — a move that would also further drain taxpayer dollars.

As much as Sen. McConnell says otherwise, the immunity fight is a red herring. Legal immunity will not heal the economy. Congress must act immediately to prioritize effective testing, contact tracing and vaccine development; secure Personal Protective Equipment; sustain reasonable unemployment insurance; and bring accountability and transparently to ensure that the programs intended to provide a lifeline to small business do just that and don’t line the pockets of corporations with easy access to capital.

These are the solutions that will keep the country healthy and allow individual consumer demand to determine which businesses survive. The last thing millions of unemployed Americans need as they continue to recover from the devastating financial impacts of this pandemic is to pay the cost of businesses’ mistakes.

Steve Ellis is the president of Taxpayers for Common Sense, a nonpartisan budget watchdog group dedicated to cutting wasteful spending in government.