A debate over limiting liability has just begun

Whenever we’re ready to re-open Covid-closed businesses, we’ll have to resolve some important questions about how to do so safely. One of them: what kind of measures should businesses take to keep employees and customers safe, and how should business owners be held accountable if they play fast and loose with others’ health?
This debate over limiting liability has just begun, and it’s already taken a partisan turn. That’s unfortunate, because there’s a straightforward middle-ground solution available.
Republicans have called for federal legislation to render businesses immune from lawsuits; Democrats are skeptical of the whole idea. Both sides are on to something important. The risk of being sued — and having to pay outsize damages if people become sick — is real. But so is the risk that complete immunity from lawsuits would lead to lax safety standards that endanger public health.
Congress should direct the CDC to issue a specific protocol designed to keep workers and customers safe. Businesses that follow these federal rules should have a safe harbor from liability, even if some people get sick on their premises. Those who break the rules should be able to be sued for breaches that lead to infection.
This approach would follow the basic rule of tort law, which is that if you make “reasonable” efforts to avoid accidents, you shouldn’t be liable; if you don’t, you should pay the costs of damages that ensue.
At the same time, linking liability a clear federal guideline would solve the most serious problem associated with potential Covid lawsuits: uncertainty about which preventive measures would count as reasonable, creating disincentive for businesses to take the risk of reopening.
Ordinary tort liability won’t work very well here, because it relies on after-the-fact judgments by juries about what counts as reasonable precautions. The great Judge Learned Hand proposed that reasonableness should be quantified by measuring whether the cost of the burden of accident prevention (known as B) outweighs the expected value of the accident — the probability of the accident (P) multiplied by the gravity of the loss (L). That’s more predictable than a jury’s instinct. But it still relies on a business owner’s capacity to predict the probability of an accident and the magnitude of its costs. Doing so is inordinately difficult during a developing pandemic.
If business owners cannot know reliably how likely it is for employees to get infected and how costly their infections will be, then there’s no simple way for the business owners to set the correct level of prevention. Consequently, business owners might stay closed for weeks or months longer than they need to.
Yet opponents of a complete liability waiver are also correct to worry that it would create the wrong incentives for businesses, allowing them to ignore even the most basic life-saving safety measures. Most workers shouldn’t be thought of as willingly assuming the risk of infection by coming to work. Most aren’t truly free to decide whether to come back to work; they’re constrained by the threat of losing their jobs, not to mention the imperative to feed their families. And anyway, modern tort law imposes a duty of reasonable care on employers when workers come to work even under ordinary, non-pandemic conditions.
The solution in this situation is to specify the content of reasonable care — in advance.
—Bloomberg