Business Law

Ontario Introduces Bill to Protect Businesses From COVID-19 Liability

Business owners throughout the province have faced multiple changing guidelines, closures and restrictions since the start of the COVID-19 pandemic. As most of the province remains in stage 3, Toronto and some other highly impacted areas are in a modified version of stage 2, which prohibits certain activities, such as dining in a restaurant or working out in a gym. No matter which stage businesses are at throughout the province, there are certain precautions they must abide by and enforce, including mandatory masks or face coverings and social distancing guidelines. Despite best efforts to keep employees and clients safe, the potential for infection remains any time members of the public are in close proximity to one another. Business owners may be concerned about their potential liability if a member of the public becomes infected after visiting their establishment.

As we’ve seen with long-term care facilities, unfortunately, infections can spread quickly, resulting in civil litigation for failing to adequately protect patients and their families. These cases are in the early stages and have yet to be decided by Canada’s courts, but there is the risk of costly civil liability for those who own and operate these facilities. Could the same also be said of other establishments where outbreaks occur? For example, there have recently been stories in the news of outbreaks occurring at a spin class in Hamilton, and a wedding in Vaughan. Further, a study conducted by the Institute for Work and Health found that 1 in 5 infections can be attributed to the workplace. At what point does liability fall to the business owner in such cases?

Bill 218, “Supporting Ontario’s Recovery Act, 2020

Bill 218, recently introduced by Ontario Attorney General Doug Downey, may assist business owners who make a ‘good faith’ effort to protect customers and employees, by limiting their liability for infections occurring at their establishments. Section 2 of the Act states:

(1)  No cause of action arises against any person as a direct or indirect result of an individual being or potentially being infected with or exposed to coronavirus (COVID-19) on or after March 17, 2020 as a direct or indirect result of an act or omission of the person if,

  (a)  at the relevant time, the person acted or made a good faith effort to act in accordance with,

         (i)  public health guidance relating to coronavirus (COVID-19) that applied to the person, and

        (ii)  any federal, provincial or municipal law relating to coronavirus (COVID-19) that applied to the person; and

  (b)  the act or omission of the person does not constitute gross negligence.

The Act does not protect business owners who fail to follow public health guidelines, as it explicitly states that the business involved must have made a “good faith effort” to act in accordance with all guidelines and regulations. The Act further defines “good faith effort” as an “honest” effort, whether or not the actual effort was reasonable. The Bill further states that acts of gross negligence are exempt from protection under the new law.

Protecting Employees and Employers

The Bill not only protects businesses from civil claims from customers or other visitors but from employees as well. Establishments making a good faith effort to protect their staff (by providing adequate personal protective equipment and social distancing guidelines, for example) will be sheltered from actions by employees who may become infected at work. Further, the Act also protects individual employees from liability. If, for example, an employee attended work at a retail store or gym while infected, but asymptomatic, they may expose others to infection during that time. However, if they were taking all recommended precautions and did not know they posed a threat, they would likely not be vulnerable to a civil claim from anyone they unwittingly exposed.

Some Express Concerns that the Bill is Too Broadly Worded

While the need to protect businesses from further financial damage due to the pandemic is clear, some fear the wording of the Bill may go too far in that direction, making it difficult for those who become infected to hold responsible parties liable. Kris Bonn, the President of the Ontario Trial Lawyers Association, fears that the standard of gross negligence will place too onerous a burden on claimants looking to recoup costs after becoming infected. Claimants may have to invest significant expense into the discovery period of a trial in order to fully ascertain the likelihood of success of their case, which may discourage parties from litigation overall.

The effect of the Bill on COVID-19 litigation for businesses and entrepreneurs remains to be seen, as the Bill has yet to receive Royal Assent. However, we will continue to monitor the situation and provide updates as they become available.

Whether you are a small business looking for options to manage financial stress during the pandemic or require representation in moving ahead with bankruptcy proceedings, GLG LLP can help. Our skilled business lawyers in Toronto regularly assist corporate clients with a variety of issues, including the configuration and structure of a venture in a way that is most beneficial to those involved. Further, we advise and represent corporate clients on related matters including commercial real estate ventures and litigation if necessary. If you are a business owner with concerns related to your financial obligations and responsibilities in light of COVID-19, we will review your situation and work with you to find your best path forward. Call 416-272-7557 or complete the online form to arrange a consultation with one of our lawyers today.