Law firm partner notes ‘that Covid negligence claims will make PPI claims look like a warm-up act’
Businesses operating within the hospitality and leisure sector should expect a “surge” in employers’ liability (EL) claims as staff grapple with the realities of returning to work after the industry reopened in July following enforced closures resulting from the Covid-19 national lockdown.
Despite it still being “early days” as the hospitality industry finds its feet again after months of closure, David Scott, partner and head of leisure and hospitality at insurance law firm Keoghs, believes there will be an “inevitable” uptick in employers’ liability claims for this sector, in part because causation could be easier to prove compared to public liability (PL) claims, for example.
“We anticipate seeing weird, wonderful and spurious claims, inevitably driven by social circumstances where people are struggling financially,” he said. “Commentators are suggesting that Covid negligence claims will make PPI claims look like a warm-up act.”
A key driver of potential EL claims within the hospitality and leisure sector lies in the fact that many of these employees perform ‘front of house’ style roles, such as receptionists, which involves interaction with the general public. Whether staff are, therefore, provided with adequate personal protective equipment (PPE), or are awarded powers to enforce social distancing – for example, in queues – could then be the basis for Covid-19 EL claims.
There could also be issues surrounding potentially defective equipment, if businesses have had to loan items from other companies upon reopening, or if maintenance regimes have gone out of kilter due to the prolonged closure over lockdown.
“Also, the employee dynamic of temporary staff and [the] potential for widespread redundancies as operating models change; businesses are under threat and survival will drive claims,” Scott added.
Scott further noted the potential for subjective EL claims linked to the pandemic. This could include claims around increased stress or anxiety for employees who felt “forced to work”, staff who believed they were overworked due to “reduced staffing levels to adhere to social distancing” juxtaposed with “increased demand” creating additional pressure, or claims from employees who were redeployed yet received, in their opinion, inadequate training and a lack of supervision or guidance.
Some staff may also submit EL claims based on customer behaviour if they have been subject to bullying or harassment.
Regarding these indirect Covid-19 claims, Scott said: “Claims are likely to be spurious, but should be defendable with the right documentation.
“Courts will carry out a balancing exercise for Occupiers’ Liability Act claims between what was needed to protect health as part of the pandemic and general health and safety guidance.”
Employers within the hospitality and leisure sector may also have to contend with direct coronavirus claims from staff, where employees allege “that they contracted Covid-19 as a result of coming to work, or [from] a member of the public who came to the location”.
However, establishing causation here “will be very difficult to prove”, said Scott.
He continued: “Pre-lockdown, it would be extremely difficult to prove whereabouts.
“Until end of May, beginning of June there was limited testing and without a confirmed diagnosis a claim may struggle to succeed – albeit, it may be enough to have confirmation from NHS 111 that [employees] reported symptoms [that] are consistent with Covid-19 and [would require] self-isolation, given the lack of [available] testing.
“Even if a claimant tested positive, unless they are the only person in the household to have the left the house then it would be difficult to prove it was contracted at the operator’s business as opposed to from a relative.
“As social distancing is relaxed, the waters will be further muddied as it would [be] difficult to say that [the workplace] was the only place the person could have contracted Covid-19.
“Is there potential for these claims to be approached by the courts like holiday sickness claims, [as in] you eliminate all of the causes and what you are left with is considered to be the root cause?”
Monitoring independent contractors on-site is another consideration. Scott cited an anecdotal example from one of Keoghs’s existing clients where “a contractor coming onto site for cleaning purposes has tested positive for Covid-19 and a member of the operator’s kitchen staff has come into contact [with them] and they themselves contracted coronavirus.”
Deciding causation then is a “huge hurdle” for both EL and PL claims.
Scott added: “Undoubtedly if EL claims and PL claims are presented, the claimant will still encounter a huge hurdle insofar as establishing causation is concerned. However, operators must be in a position to defend and evidence their policies, procedures, risk assessments [and] training documentation to demonstrate compliance with the appropriate government guidelines and health and safety guidelines since the beginning of the lockdown and guidance insofar as reopening is concerned.”