The global pandemic has impacted almost every aspect of our lives. Not only have schools and businesses closed, but international travel has ground to a halt, and for these seeking justices, courts across the country have had to adjust how they convene. The result has been that dockets have become as snarled as the traffic around a college football stadium.
The impact is not only closures of courts, but a growing number of cases are also seeking to clarify the meaning and application of force majeure clauses, and the looming tsunami of bankruptcies could fill court schedules for years to come.
As such, legal experts across the country as questioning how the pandemic could change lawsuits forever. The implications of which will have a direct impact on businesses large and small as everything from restaurants to hospitals and airlines are seeking to either gain protection via court order or are being dragged into court by creditors seeking to get paid.
While a wave of bankruptcies is inevitable whenever the economy turns for the worst, an exciting shift in legal opinion could be how the courts – in the U.S. and elsewhere – rule on how force majeure clauses can be enforced given the spread of the COVID-19 virus and the subsequent need to shut down or limit businesses ability to operate.
Among these questions is how businesses can meet their contractual requirements when the government has ordered them to close. But the challenge is that this clause, which means ‘superior force’ in French, but has been taken to mean an “Act of God” in legal circles does not apply to all contract equally.
Like everything within the law, context matters, and the invocation of force majeure clauses depends very much on how the contract is worded. Given that these clauses cannot be declared until the contract under question is in breach is argued by some that prematurely warning customers of the clause’s invocation could be premature.
For a business dispute attorney, this sort of litigation is that chance to make or break their career. There are several reasons for this. First, these lawyers specialize in navigating the complicated world of contracts and the legal requirements businesses face to meet their obligations. Then there is the chance to help the little guy. Lawyer jokes aside, many lawyers seek to help business owners to overcome challenges they are facing.
Lastly, there is the opportunity to be involved in a case that will make law – in as much a court ruling can be used as a precedent for future decisions. This is where it gets interesting, as rulings on cases were the force majeure clause is central to the argument will change lawsuits as it is applied to questions such as workers’ rights, contractual obligations, and legal liability.
Beyond business cases, liability cases are also testing the immunity of government agencies and their employees. This includes situations that have been brought against the U.S. Citizenship and Immigration Services over its handling of medical professionals living in the country on the H1-B visas. While these visas allow the U.S. to attract talent from across the globe, it has also come under intense scrutiny during the current administration.
Beyond these issues, courts across the world are also facing multiple operational challenges as the need for social distancing and rolling shutdowns have forced closures and delays. While this “new normal” has been met with video conferencing and paperless processes, questions remain about security and fairness.
While depositions could efficiently be conducted remotely, there have been challenges. Not only does the lack of face-to-face depositions make it harder for experienced lawyers to read the body language of the person they are questioning, but technical challenges have also interrupted proceedings.
At the same time, law firms large and small are taking a good look at their costs. The result has been layoffs at many firms and enforced cost cuts, such as downsizing expensive office space and cutting back on travel budgets.
However, do not expect that these cost-cutting measures will lead to lower legal bills. Instead, the belt-tightening could lead to a lower level of service as law firms become more focused on resolving cases profitably rather than being an advocate for their clients.
The impact is that outcome of lawsuits in the future will depend on the precedents set by the courts of today. This includes rulings on the proper invocation of force majeure clauses and bankruptcies brought about by COVID.
Also, courts might seek to expand the use of digital tools in future proceedings. This could include remote deposition and further reliance on paperless filings. Lastly, cost-cutting at law firms could impact the level of service that clients receive in the future, and this could mean that some lawyers become more focused on the bottom line rather than fighting for the clients.
