COVID-19 lawsuit immunity won’t help economy, might increase spread, poll of economists says

By: - September 15, 2020 12:50 am

Ohio Lt. Governor Jon Husted (third from left) is flanked by General Motors CEO Mary Barra (left) and LG Chem Vice Chairman and CEO Hak Cheol Shin (right). They are joined by officials from JobsOhio. Photo courtesy the Lt. Gov. office.

Ohio Gov. Mike DeWine on Monday signed a bill providing businesses and other entities broad immunity from lawsuits related to coronavirus infection. 

The idea behind the law was to help speed recovery by removing economic uncertainty posed by possible lawsuits filed by employees, customers and others who might become sick if organizations reopened during the pandemic. But a strong majority of Ohio economists surveyed on the matter said the law isn’t likely to help the economic recovery, while it could make the pandemic worse.

“The pandemic IS the cause of the recession,” University of Toledo economist Kevin Egan said in the comment section of the survey, which was released Monday. “Bringing the spread of COVID-19 under control IS the solution for quicker economic recovery. Shielding firms from liability is not efficient; gives them incentives to do too little for worker protection.”

The law, House Bill 606, requires that someone would have to show “reckless, intentional, or willful or wanton misconduct,” to hold businesses, schools or nonprofits liable for “actions or omissions resulting in the exposure to, or transmission or contraction of, COVID-19,” the National Law Review reported.

During a signing ceremony Monday, Lt. Gov. Jon Husted said businesses traditionally keep customers and workers safe, “but they’re not accustomed to doing it on the fly during a pandemic.”

The law shields businesses retroactive to the start of the pandemic, when health guidance was changing quickly. Husted said HB 606 is needed because of the fluid situation in the spring, but he also seemed to imply that customers and employees would be safer if it was harder to sue the organizations where they got sick.

Businesses “were looking for some security, some predictability in the law to make sure that they could keep their workplaces safe and avoid liability so they could bring people back to work and House Bill 606 provides that predictability and security,” Husted said.

But a majority of the panel of economists surveyed said passage of the business-friendly bill isn’t likely to benefit the economy or the public health. Of the 36 members of the Ohio Economic Experts Panel who responded to the survey, conducted by Scioto Analysis, just eight agreed that its passage would help the economic recovery. Another 17 said it likely wouldn’t help with the recovery. 

Ten others said they were uncertain about the law’s economic impact.

“The tradeoffs are complicated and the devil is in the details,” commented Jonathan Andreas of Bluffton University, one of the economists who said he was uncertain. “Too little responsibility encourages reckless behavior but too much liability can cause too much caution.”

The economists’ responses were even more lopsided when asked whether HB 606 would create incentives for businesses and other organizations to take actions that would increase the spread of COVID-19.

Twenty two panelists said they believed the law likely would create such incentives. Another five were uncertain and six economists said they didn’t think the new law will make businesses act more cavalierly toward the new coronavirus.

One economist commented that the threat of legal action has historically played an important role in getting businesses to emphasize safety.

“The safe cars we drive today are due to lawsuits regarding negligence in the auto industry,” wrote Sucharita Ghosh of the University of Akron. “Companies should be held to the same standard for COVID-19 cases.”

Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

Marty Schladen
Marty Schladen

Marty Schladen has been a reporter for decades, working in Indiana, Texas and other places before returning to his native Ohio to work at The Columbus Dispatch in 2017. He's won state and national journalism awards for investigations into utility regulation, public corruption, the environment, prescription drug spending and other matters.