Federal lawmakers last week unveiled a stimulus package of COVID-19 relief legislation that includes further payments to unemployed workers and liability protections for health care workers, schools and businesses as they reopen amid the pandemic.
Under the HEALS (Health, Economic Assistance, Liability Protection and Schools) Act, businesses would be presumed to be operating in good faith, following “applicable government standards” for virus mitigation, and compel plaintiffs to show willful misconduct or gross negligence in any legal action.
“The HEALS Act increases the cost of filing a frivolous lawsuit, while still protecting the right of plaintiffs to bring meritorious litigation,” Wayne Winegarden, Ph.D., senior fellow in business and economics at the Pacific Research Institute, told the Northern California Record by email.
“By striking a better balance that removes the incentive to file litigation in the hopes of extracting a large settlement, capping litigation exposure, when combined with establishing standard health protocols, is an important improvement to the litigation landscape,” Winegarden said.
Under the provisions of the bill, class-action trials would be prohibited unless all parties consent, the National Law Review reported.
The pandemic has resulted in “extreme hardships” on business owners large and small, Winegarden said.
“These hardships increase the cost of running a business, and when the cost of any activity increases, you get less of that activity,” Winegarden said. “For Californians, this means a slower growing economy and stagnating incomes. Removing the litigation threat for businesses that operate in good faith lessens the costs on businesses, partially offsetting these negative economic consequences.”
Practically speaking, if the HEALS Act becomes law, the legislation would help expedite economic recovery in California, Winegarden said.
“Given the 34% contraction (on an annualized basis) in the nation’s economy during the second quarter of 2020, empowering businesses to return to operations is critically important,” Winegarden added.
Twelve states have already passed liability protection legislation.
“Uncertainty detracts from economic growth,” Winegarden said. “Businesses and healthcare providers are facing a growing amount of uncertainty that they could face legal actions from customers, patients, or employees that contract Covid-19. If this legal uncertainty is allowed to stand or grow, it will continue to discourage businesses from operating, and it will worsen the current economic recession, making it more painful than necessary.”
The HEALS Act would leave liability protections in place until Oct. 1, 2024, or until the coronavirus is no longer classified as a public health emergency, whichever happens first.
Republicans and Democrats still are continuing to negotiate the legislation, which could be voted on sometime this month.