Senate Majority Leader Mitch McConnell is working on legislation that would vastly expand liability protections for businesses as states reopen and people go back to work.
The legislation will protect “businesses, nonprofits, governments and workers and schools who are following public health guidelines to the best of their ability,” McConnell said.
The bill would address fears that people would unleash a tsunami of liability suits against businesses, schools, and government as inevitably, some people will get sick after states reopen.
McConnell said the bill will include “new legal protections” for businesses, nonprofits and government agencies, and try to create an environment where schools will be comfortable to reopen in the fall.
“If we want schools to reopen this fall, we’ll have to create the conditions to make that possible,” he said.
McConnell said that he also hopes the bill will “find ways to expand existing protections” for manufacturers who create coronavirus-related therapeutics or vaccines, and that he also wants it to “create new protections” for medical equipment manufacturers.
The American people, the most litigious people in the world, would be unable to resist the “deep pockets” of business and government without the protections. And much of the burden would fall on small businesses.
A study of tort liability costs for small businesses indicates that litigation costs small businesses in America over $105 billion per year. These small businesses bear 81% of business tort liability costs but take in only 22% of revenue.
Because small businesses do not often have significant resources to defend themselves in drawn-out, costly litigation, being named in a frivolous lawsuit could mean a small business must close its doors for good. One in three small business owners have been sued or threatened with a lawsuit, according to a national opinion survey of voters by Penn Schoen Berland and Public Opinion Strategies.
The problem comes with separating the frivolous suits from those that have merit. One can imagine suits against a hardware store because social distancing wasn’t enforced adequately. There may even be suits against school districts for similar reasons. Legitimate suits that seek damages for negligence need to go forward but businesses will need protection from many lawsuits in the post-coronavirus era.
Democrats have been wary over McConnell’s push to expand liability protections for employers, warning that they will not support something if it weakens protections for workers.
McConnell said Tuesday that the bill wouldn’t provide absolute “immunity.”
“To be clear now, we’re not talking about immunity from lawsuits. There will be accountability for actual gross negligence and intentional misconduct. That will continue,” he said.
Admittedly, McConnell and the Republicans will be trying to thread the needle with this bill, but not passing liability protections will almost certainly slow the recovery.