COVID-19: Fast-shifting legal landscape leads to fresh wave of litigation

If Brexit was a spanner in the works of business as usual, the Coronavirus outbreak is an entire toolkit jammed in the cogs of the economy. Leaving no industry unscathed, the pandemic has impacted the ability of businesses across the globe to keep calm and fulfil contractual obligations.

In the US, nearly 800 lawsuits have been filed over the novel coronavirus, and more than 230 of them dealt with prison conditions. After prison lawsuits, the next most popular were lawsuits involving insurance disputes, contracts and civil rights (excluding the prison claims).

While many companies have relied upon the rarely invoked ‘Act of God’ or ‘Force Majeure’ clause buried in their fine print, outcomes nearly always depend on the precise wording used in the clause, the circumstances in which they entered into the contract and the situation that has arisen.

The result has been a flurry of disputes that have escalated into uncharted territory.

In March, for example, Hearts owner Ann Budge began taking legal action against the Scottish Premier Football League after her club was relegated as a result of a premature end to the season.

Although most fans recognise that their team didn’t get off to the best start to the season, the decision to relegate Heart of Midlothian Football Club with 8 games to play will have vast financial implications on the club. “Buzzing for away days at the High Court,” harked one Hearts supporter sarcastically on social media.

While courts across the world are altering procedures in response, the influx of covid-19 related cases is set to continue. We explore some of these below.

 

Intellectual property disputes sparked in high-demand products

As world governments rolled out their own policies to stem the spread of the virus, certain industries saw an unprecedented boost in sales: toilet paper, hand sanitiser, disinfectant and many other cleaning products are more in demand than ever – and the surge has sparked an influx of intellectual property disputes.

As an example, digital healthcare start-up Healthvana is now taking legal action against the company behind the “As Seen On TV” slogan for selling “over-priced” hand sanitizer under the plaintiff’s name during the COVID-19 crisis.

According to plaintiff Healthvana Inc, Telebrands Corp violated federal trademark law by using the Healthvana name on $15 bottles of sanitizer. In a lawsuit filed earlier in the month, the healthcare company complained of considerable backlash against them from angry consumers.

In another Coronavirus-triggered intellectual property lawsuit, a packaging design company has accused the maker of Lysol Disinfecting Wipes of stealing the patented packaging technology that keeps the cleaning wipes wet as demand for the product continues to surge.

 

Supermarkets face mass legal action over ‘discrimination’

In the UK, the panic-buying onslaught saw delivery slots disappear and websites crashing within a matter of hours. Now, major supermarket chains across the country are facing legal action from vulnerable individuals who have been left unable to buy food and other groceries during the pandemic.

While government measures have been taken to ensure supermarkets prioritise slots for those in need, Many of them have found it impossible to order home deliveries online, because they are not in the small proportion of disabled people seen by the government as being “extremely clinically vulnerable”.

Some of the claimants have expressed that this would not be a problem if they were able to shop safely in their local supermarket – were these supermarkets willing to make reasonable adjustments in light of social distancing rules to accommodate for various disabilities. So far, this has yet to be seen.

 

Hospitality sector struggles prompt insurance claims

In the UK, major insurance firms including AXA, Zurich, QBE and RSA are facing a multi-million-pound lawsuit from British pubs, hotels, restaurants and leisure groups, who allege that legitimate business interruption claims have been unfairly rejected.

A new Hospitality Insurance Action Group (HIGA) on Wednesday issued a “call to arms” to the insurance industry to step forward and have their policies checked for free in the latest move to tackle insurers over their response to the coronavirus pandemic.

The Financial Conduct Authority (FCA) said earlier this month that most insurance policies bought by smaller British companies do not cover the coronavirus-related disruption, but that those that do should pay out quickly.

According to experts, any successful claim will largely depend on whether the lockdown triggers a clause in business interruption policies designed for insured premises that cannot be used because of restrictions imposed by a public authority, experts say.

 

Looking ahead: a new wave of employment litigation

Over the course of the last locked-down months, unprecedented disruption, drastic action and difficult decisions have all made for a breeding ground for fresh claims and court proceedings. With no clear roadmap to guide us forward, the fallout has been colossal.

Even after the eye of the storm has passed, a fresh wave of litigation is expected to pass in areas such as employment law, where disputes over worker protections are already beginning to bubble.

Many of these would come in the form of claims from employees – and potentially customers – that adequate measures were not taken to safeguard them from the coronavirus and support them through the pandemic. This extends into personal injury law in instances where failure to provide protection has led to an individual contracting the virus.

For further guidance, contact our team today. No matter where you are in the world, our heavy-weight team of commercial and consumer litigators are available and ready to help you.

 

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