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Business Litigation Likely to Follow the Coronavirus


There is no question that the coronavirus is going to lead to a significant amount of litigation, whether that involves consumer fraud issues, foreclosure issues, homeowners’ association disputes, disputes between landlords and the tenants, business litigation, and more. The virus has brought about severe changes in the workplace, interrupted supply chains, forced workers into quarantines, and done much, much more.

Some litigation has already been filed; for example, the federal government has already brought its first consumer fraud lawsuit against a website claiming to sell coronavirus kits, and plaintiffs are currently seeking class action status to sue the hand sanitizer company Purell in connection with its claims that its product prevents illness.  Other litigation has also been filed concerning employers and other parties failing to take steps to properly protect workers and cities from the virus and the harm it causes.

Breach Of Contract Claims & Force Majeure Clauses

The fallout from business disruption in particular is going to be severe, with companies being sued over missed deadlines, unfulfilled orders, and a number of other breach of contract claims. Courts are likely to review disputes over force majeure clauses, which release parties from contract obligations due to an event of an act of God.  Businesses will undoubtedly argue that they could not fulfill their end of an agreement because they could not obtain supplies from China, or the workers could not come to work due to the quarantine, etc.

Insurance Companies & Business Interruption Insurance

Insurance companies will also inevitably find themselves in court, as businesses dispute whether their policies cover them in times of business interruption. Most insurance companies have been very careful to dictate that business interruption insurance only applies to events that lead to significant physical damage, such as earthquakes and fires, in policy language. After previous outbreaks, some even explicitly included language excluding coverage due to outbreaks. As a result, in an effort to get around this language, businesses will have to make creative arguments in court, for example, by claiming that several of their workers tested positive for the virus, which then compromised the physical integrity of the workplace, etc.

Shareholder & Other Lawsuits

Businesses may also face lawsuits from shareholders who question the legality of management decisions and argue that companies failed to act effectively in response to the pandemic, as well as premises liability claims from members of the public who claim that they did not do enough to quickly protect people or have the right contingency plan in place, such as airline and cruise companies.

In addition, some businesses themselves have already started to bring claims against select government agencies in connection with delays that have not only affected business operations, but also placed lives at risk in some circumstances; for example, medical staffing agencies that claim US Citizenship and Immigration Services failing to review applications for H-1B visas for skilled foreigners has delayed an influx of much-needed doctors and medical professionals to help address the outbreak.

If You Have Any Litigation-Related Questions, Contact Our Florida Business Litigation Lawyers

If you have concerns about litigation, our Sarasota business litigation attorneys can help ensure that your business interests are protected. Contact us today at Suncoast Civil Law to find out more.