Guest view: Who will pay for pandemic impacts?

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By Dan Walters

The COVID-19 pandemic and the severe economic recession it induced are disasters unparalleled in recent generations and it will take years to fully recover from their human and financial tolls.

Already, however, they are spawning legal and political conflicts over whom, if anyone, should be accountable for their impacts.

There is, for instance, a flurry of lawsuits. Cruise lines whose passengers became ill are obvious targets, but legal claims also include employers alleged to have provided insufficient coronavirus protections to their workers, entertainment venues and airlines that failed to provide refunds to their patrons for cancelled services, and countless other conflicts.

The prospect of endless litigation, in turn, is generating new political fights over whether limits should be placed on civil liability during the pandemic/recession crisis.

In California, it has renewed the perpetual conflict over liability, pitting business, employer and insurance interests against lawyers who specialize in personal injury suits.

The Civil Justice Association of California, a business coalition, fired a preemptive strike recently in a letter to Gov. Gavin Newsom, citing an “imminent threat of litigation.” It asks for an executive order and legislation to immunize “all private entities and their workers providing critical services, goods, and facilities during the COVID-19 state of emergency.”

A subset of California’s perennial tort wars is the conflict over workers’ compensation, the multi-billion-dollar program of compensating workers for job-related illnesses and injuries. Roughly the same interests that duel over liability also spar over the rules governing workers’ compensation’s eligibility and benefits.

Labor unions are pressing Newsom for an executive order that would establish a legal presumption that “essential workers” who fall ill would be eligible for benefits without having to prove that they contracted the virus on the job.

“Workers on the frontlines of the COVID-19 pandemic put their lives at risk just doing their jobs,” Art Pulaski, head of the California Labor Federation, told Newsom in a letter last month. “If they are infected with COVID-19, the workers’ compensation system must quickly provide medical and indemnity benefits—such workers should not have to fight denials and delays while fighting for their lives.”

Employers are resisting such an order, citing a study by the Workers Compensation Insurance Rating Bureau that it would raise costs to employers between $2.2 billion and $33.6 billion per year with a mid-range estimate of $11.2 billion, or a 61 percent increase. 

California employers already pay the nation’s second highest premiums for workers’ compensation insurance and are trying to head off an order that, they believe, Newsom is on the verge of issuing.

“Many businesses and their owners are casualties of the necessary economic shutdown,” California Chamber of Commerce President Allan Zaremberg told Newsom in a letter. “They cannot be expected to shoulder a new employer-financed social safety net, with expensive new mandates, at precisely the moment when small businesses are shuttering, employee hours are cut, and uncertainty about the future is the new normal.”

While it’s said that the pandemic “changes everything,” some things never change and that includes these two never-ending sagas.

Dan Walters wrote this column for calmatters.org.