Regardless of whether the COVID-19 outbreak has caused companies to face economic stress due to liquidity, labor or contract issues (e.g., impediments to ceasing payments to employees or to landlords in the current environment) or due to interruptions in operations, companies now may face a new challenge: Potential tort claims brought in lawsuits by employees for injuries due to COVID-19, or by family members claiming that an employee was wrongfully exposed and infected with COVID-19 at work.
A recent trend toward litigation has increased the risk companies face, as opposed to the traditional approach which historically limited such risks as labor hazards to coverage by the social security quotes paid to the Social Security Institute. Regardless of Mexican law being based on a codified system, case law (which is mandatory in some cases) has been shaping and expanding the extent and depth of provisions opening a path for plaintiffs trying to seek a civil litigation avenue (including claims for pain and suffering, personal injury and damage to goodwill – non-pecuniary based damages). In that regard, it is important to bear in mind that the current Chairman of the Supreme Court of Justice, prior to assuming that role, advocated to domesticate and assimilate certain concepts of Anglo-Saxon law in support of certain claims (e.g., claims seeking to pierce the corporate veil, obtain punitive damages and indemnifications for pain and suffering and damage to goodwill).
Such claims, if successful, would dramatically increase the amounts which have more traditionally been recovered by plaintiffs in Mexico, by incorporating the concept of life expectancy as a component to set the threshold of damages to be awarded under such prong. In addition, case law that was presented by the current Chairman of the Supreme Court of Justice while acting as sitting or proposing Justice, outlined that the intent of a resolution awarding damages for pain and suffering or goodwill should be punitive, increasing the potential risk on a corporate defendant.
In light of this, in order to maintain a safe and healthy work environment, which will also serve to help to reduce companies’ potential exposure to such risks, companies should consider implementing a set of preventive measures with respect to COVID-19.
Likewise, companies should conduct a thorough review of potentially applicable insurance policies to assess coverage. The outcome of that analysis depends on the particular language of the applicable insurance policy, and there also may be regulatory barriers to such coverage.
Companies should abide with the totality of the recommendations ordered by the Ministry of Health in regards to COVID-19, as well as with other practical measures that could be assessed on a case-by-case basis, depending on the industry and activity being conducted (e.g., a health products manufacturing facility will have different protocols that a steel company). The intent of such measures is to better protect employees by promoting a healthy and safe work environment. Such measures may constitute evidence to support the company’s position that it is not responsible for certain claims. A general set of recommendations may be reviewed through our previous alert here.
For more information, please contact your Foley relationship partner. Foley has created a multi-disciplinary and multi-jurisdictional team to respond to COVID-19, 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. Coronavirus Resource CenterClick 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.