Companies Should Prepare Now for Future Disputes Due to the Coronavirus

21 March 2020 Coronavirus Resource Center:Back to Business Blog
Authors: Andrew A. Howell Robert Slovak Jonathan Michael Thomas

The coronavirus pandemic is no doubt an unprecedented event in the lives of most Americans today. Like U.S. businesses, the U.S. court system has been impacted by the seemingly draconian measures under which society is operating. Hearings are being postponed, deadlines are being pushed and extended, and jury trials have been cancelled indefinitely as potential jurors have been asked to shelter in place. Productivity is grinding to a screeching halt. At some point, the proverbial flood gates will open. Current litigants whose cases have been thwarted will be ready to speed back up and push towards a resolution, while a multitude of new cases overwhelm the court system. While it is likely that life and business as we know it will remain irregular for quite some time, companies can and should proactively prepare for the inevitable lawsuits the pandemic will spawn. 

Officers and directors should take the following steps to be prepared:

Identify Potential Disputes.

Identify key contracts, operations, clients, vendors, pending letters of intent, and insurance policies that may be the sources of future disputes.

Take Steps to Ensure the Best Posture in Future Disputes.

Ensure that the company is providing required notices, documenting current conditions, and collecting pertinent data so that the company is prepared to face disputes that can be anticipated. This starts with an analysis of the key terms that will govern.

Seek Legal Advice on Best Next Steps.

Attorneys cannot change events of the past, but can help mitigate potential issues. Seek counsel now to ensure the company will be in the best position possible. While governing terms may seem clear, what law controls and how that law interprets an agreement will greatly impact best next steps. A simple example concerns “force majeure” clauses, which address how specific, and often unforeseen, circumstances will affect parties’ contractual duties to perform. How these clauses may affect businesses often depends on the specific contractual language at issue and a survey of court cases interpreting that language under similar or analogous circumstances.

Take Steps to Mitigate Future Disputes with Shareholders.

See How Corporate Officers and Directors Can Mitigate Future Shareholder Disputes.

In summary, companies should not wait for the inevitable disputes to arrive. Rather, board members and corporate officers should take steps now to anticipate, prepare, and mitigate the risk of suffering negative impacts from the coronavirus. For more information about recommended steps, please contact your Foley relationship partner. For additional web-based resources available to assist you in monitoring the spread of the coronavirus on a global basis, you may wish to visit the CDC and the World Health Organization

Foley has created a multi-disciplinary and multi-jurisdictional team, which has prepared a wealth of topical client resources and is prepared to help our clients meet the legal and business challenges that the coronavirus outbreak is creating for stakeholders across a range of industries. Click here for Foley’s Coronavirus Resource Center to stay apprised of relevant developments, insights and resources to support your business during this challenging time. To receive this content directly in your inbox, click here and submit the form. 

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services