The COVID-19 pandemic continues to present businesses and other organizations with unprecedented challenges in managing risks related to their operations. Most organizations are familiar with the duty of care concept – a legal obligation of the organization, through its employees or agents, to take reasonable steps to avoid acts or omissions that may result in harm to other members of society. Failure to discharge such a duty constitutes negligence and leaves one open to liability for the resulting harm.
The COVID-19 pandemic, and government efforts and directions to take steps to “flatten the curve” of increasing COVID-19 cases bring new context to this duty. Many businesses are wondering what they may be required to do or avoid doing in order to prevent the spread of the virus to customers, employees and others to whom they might owe a duty of care, particularly as public health restrictions eventually relax, allowing for businesses to return to “normal” operations. There are no clear answers to these questions, but awareness of the applicable legal framework will help businesses minimize liability risks.
This bulletin focuses on the duty of care that may be owed by an organization to its stakeholders. Corporate directors and officers may also attract personal liability for their actions or the actions of their company, but that is beyond the scope of this bulletin. For a discussion of a director’s duty of care in managing a corporation, see the recent Dentons Insights article published by our Edmonton colleagues on April 1, 2020.
The duty of care in Canadian common law arises from a 1932 case, where the English House of Lords converted the biblical guidance to “love thy neighbour” into a legal duty to take reasonable care to avoid acts or omissions which could reasonably be expected to injure thy neighbour.1 From this description of the duty of care, the obvious question becomes “who is my neighbour?” The answer to this question is “persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected” when I am considering the acts or omissions in question. These are the people to whom your business will owe a duty of care.
The existence of a duty of care depends on the unique circumstances of each situation. The relevant considerations are well established in Canadian law; (1) whether there is a sufficiently close relationship between the parties to bring the injured party in the reasonable contemplation of the other party such that the other party’s carelessness might cause damage to the injured party, and (2) whether other reasons, such as public policy concerns, should negate or otherwise limit the duty of care established under (1).2
The existence of a duty of care is not usually in dispute within commercial relationships or where the general public could be impacted by a party’s negligence. Accordingly, in the public health context, a typical business will owe a duty of care not to cause harm to customers, counterparties and the public at large. Once a duty of care is established, the party owing the duty of care must conduct themselves with reasonable prudence in order to uphold what is referred to as the “standard of care”.
It is notable that organizations will be held vicariously liable for the negligent acts of employees and agents unless these acts are unconnected to their employment or agency. The connection to employment need not be strong. Even intentional unauthorized acts will result in vicarious liability for employers if the act can be considered “modes (albeit improper modes) of doing an authorized act”,3 or the organization introduced the risk of such acts through their operations.
Public health considerations have been found to give rise to a private law duty of care in situations involving contaminated food,4 and in cases of other transmissible diseases.5 A positive duty to avoid transmission will be owed by businesses to their customers, as well as to consumers of products who have not actually purchased the product from the business. Furthermore, businesses may owe a duty of care to other parties who are not the ultimate user of relevant goods and services; for example, between organizations that work together in a supply chain. This duty may also extend to people who become infected with a disease on a secondary basis, by the individuals who were initially exposed as a result of the organization’s acts or omissions.6
Government bodies are not typically liable in tort to those who contract an infectious disease from government-regulated operations, despite the government having undertaken a plan to respond to the disease in question.7
In addition to being aware of the potential for liability for allowing infection to occur, organizations should keep in mind the potential for class proceedings if multiple infections or exposures stem from one source, act or omission.8 Responding just to the preliminary steps of a class action can be a very onerous task for any organization, and costly litigation can be difficult or impossible to avoid, even with a strong case on the merits and an appetite for settlement by the defending party.
As a result, failing to act diligently to prevent the spread of COVID-19 may represent a significant risk to an organization.
Considering the above, it may seem like a daunting task to determine how your organization should adjust the way you do business in order to avoid breaching your duty of care to your stakeholders. While specific measures that may be available or required will vary greatly with circumstances, some general considerations for conduct over the duration of the response to the COVID-19 pandemic are as follows:
The novelty of COVID-19 raises complex and uncertain legal questions regarding the extent and nature of the duty of care owed by Canadian businesses. Public health and other government directives will help define what each business must do to discharge its duty of care, but these are neither exhaustive nor definitive in this respect.
Businesses can expect to be held responsible to take all reasonable steps to minimize foreseeable COVID-19 risks, even where such steps go beyond those required by government directives. Given the gravity of harm that may ensue if preventative measures are not undertaken, a proactive approach and a very high level of diligence is warranted for businesses to continue to prevent the transmission of COVID-19, particularly as government directives begin to ease and restrictions are lifted.