Next Pandemic: Trial Lawyers Suing Small Business Owners

As long-time clients and readers know, I tend to focus on issues related to the economy, the markets, investments and related topics. But as you also know, I sometimes venture into the realm of politics and other topics which interest me but are not related to the markets or investments. Today is one of those times. You are not likely to see this elsewhere, at least not yet. Here we go.

There is growing talk that America’s trial lawyers see a unique profit opportunity in the current coronavirus crisis. That is the opportunity to sue businesses that reopen if any of their employees develop the coronavirus. Let me set this up for you as follows.

Let’s start by presuming you have a small business that employs 20-30 people. Maybe it’s a restaurant, hardware store, construction company or a small software developer – whatever. You know you have to get your business up and running again or the people you employ will have to find other work.

So, you start to call your team back. You do it in stages so not too many workers will arrive at once. You require your employees to confirm they are healthy; you insist they wear masks; and as best you can, institute social distancing. Maybe you even take employee temperatures daily.

Your business is finally open once again. It survived the lockdown. Most of your people are working again after a few weeks or months off. You think you are out of the woods and have weathered the worst economic downturn since the Great Depression. So far so good.

BUT someone comes back to work, showing no signs or symptoms of COVID-19, yet it turns out they have the coronavirus. There’s no way you could have known. You immediately send them home to quarantine as soon as their condition is known, but by then they may have spread the coronavirus to others. You hope for the best.

Then, six months or a year later, you get a summons from a court. You have been rolled into a large class-action lawsuit against similar employers – small business owners who tried to restart their livelihoods but had an employee who got the virus and possibly spread it.

The charges in the lawsuit claim damages that are enormous. The cost of defending yourself and paying for the lawyers and discovery that it requires are immediate and must be paid whether or not you are actually liable. Most small business owners don’t have that kind of money, especially after having been shut down for two months or longer.

Thus, the virus has returned to your door, only this time in the form of a class-action lawsuit brought by the trial lawyers who may not be concerned with your guilt or innocence.

I don’t like to generalize, in this case about trial lawyers. Not all trial lawyers are bad people. But based on what I read, many trial lawyers across America are gearing up to cash in on this virus crisis. These trial attorneys are reportedly developing new and creative ways to sue employers who may have employees who developed the coronavirus.

The coronavirus crisis is something brand new, of course, and will almost certainly prove to be fertile ground for trial lawyers. Their strategy based on what I read is to generate lawsuits, preferably class-actions, the defense of which is so staggering that many of those sued may have to file bankruptcy and/or go out of business.

Like kids on Christmas Eve, many trial lawyers see a bonanza headed their way as a result of the coronavirus. Businesses that must employ people in settings where the virus may propagate, even when sensible protective actions have been taken, are the source of this opportunity.

For many of the lawyers, this not about protecting anyone. It’s a chance to make a lot of money off of actions, no matter how well intentioned, that unfortunately can still lead to the virus being spread.

Republicans in Congress are now considering possible ways to mute this likely explosion of predatory lawsuits and mitigate the risk for small businesses that reopen. But the Democratic leadership in Congress says such proposals will harm working Americans. How??

This argument is wrong-headed for a variety of reasons, but the primary one is the fact that the Dems know what the trial lawyers have in mind. Which brings us to the only real question:

Do the Democrats really want this economy to stay in recession/depression until after the election in the hopes of getting rid of Donald Trump? It’s really that simple, I believe.

I hope the answer is NO, I sincerely do. I do not want to believe that a majority of Democrats would be willing to see this economy remain in a depression just to get rid of President Trump in November. But they’re making it increasingly hard for me to believe otherwise!