COVID-19 – potential liability for municipalities

Stephen Penney and Justin Hewitt

As municipalities begin opening up recreational facilities in Alert Level 2 of the COVID-19 public health emergency implemented by the Provincial Government, Municipalities Newfoundland and Labrador has been receiving inquiries regarding potential liabilities to its member municipalities.

We have provided a summary below to outline some of the potential liabilities that municipalities may face in reopening public facilities in Alert Level 2 and offer guidance as to how municipalities may reduce the risk of exposure to such liabilities.

Recommendations

A municipality may be exposed to claims in negligence in the event that an individual contracts COVID-19, which can be traced to a facility owned and/or operated by a municipality or a program run by a municipality.

To best protect itself from liability from potential COVID-19 negligence claims, municipalities should consider the following:

1. Review and continually monitor all relevant Special Measures Orders, Information Sheets and other guidelines issued by the Provincial Government concerning COVID-19;
2. Adopt a COVID-19 policy which implements the Provincial Government guidance as much as is reasonable and communicate the policy to citizens and patrons of the facilities. The policy should be reviewed and updated as public health directives change;
3. Ensure that staff adhere to the municipality’s COVID-19 policy;
4. Decide not to open certain municipal facilities if the risk of COVID-19 transmission is high and reasonable protective measures cannot be implemented;
5. Add waivers to facility rental agreements and program registration forms which specifically contemplate the risk of COVID-19; and
6. Confirm that the municipality’s general liability insurance policy does not contain an exclusion for epidemics, pandemics and/or public health emergencies.

Analysis

Potential exposure to negligence claims

Reopening and operating public facilities in the wake of the COVID-19 pandemic presents new and unique challenges for municipalities. There is potential exposure to claims against public bodies or private entities alleging negligence in implementing and administering COVID-19 health and safety precautions.

Municipalities may be at risk of negligence claims if, for instance, an outbreak (or even a single case) of COVID-19 can be attributed to a person’s attendance at a municipal facility or participation in a municipal program. To prove a claim in negligence against a municipality, a claimant must establish the following elements:

1. The municipality owed the claimant a duty of care;
2. The municipality breached the standard of care;
3. The claimant suffered damages; and
4. The damages were caused by the municipality’s breach of the standard of care.

In the case of a COVID-19 outbreak, which can be causally linked to a municipal facility, a successful claim in negligence against the municipality will almost inevitably turn on the question of whether the municipality met the standard of care. Accordingly, the best way for a municipality to insulate itself from a potential COVID-19 negligence claim is to ensure that it has met the standard of care expected of it.

Since there have not been any reported court decisions in relation to COVID-19 negligence claims, it is difficult to determine with absolute certainty how the courts will define the standard of care expected of municipalities in relation to COVID-19 health and safety precautions. However, when determining the standard of care in novel circumstances, courts consider what the ordinary, reasonable and prudent person would have done in similar circumstances.¹ A standard of perfection is not required. In determining a municipality’s standard of care in relation to COVID-19 health and safety precautions, a court will likely look to the orders and guidance issued by the Provincial Government.

The Provincial Government has issued several Special Measures Orders and guidance documents in relation to the COVID-19 pandemic. The most recently released Special Measures Order dated June 25, 2020, contains the following orders which may be of relevance to municipalities:

Gyms and fitness facilities, including yoga studios, indoor tennis, squash facilities and dance studios may open provided that physical distancing may be maintained and occupancy is limited to groups of no more than 50 people or 50 per cent capacity, whichever is less, per room.

Cinemas, performance spaces and arenas may open provided that physical distancing may be maintained. Occupancy is limited to no more than 50 people.

Gatherings of more than 50 people are prohibited.

These orders are mandatory requirements that have the force of law, and failure to comply with these orders may result in significant fines. Municipalities must ensure compliance with these orders.

Additionally, the Provincial Government has issued the following “Information Sheets for Businesses and Workplaces” for Alert Level 2 which may apply to municipalities:²

1. Arenas;
2. Indoor Pools;
3. Indoor Recreation Facilities;
4. Outdoor Recreation Activities;
5. Outdoor Swimming Pools;
6. Parks;
7. Sport Guidance;
8. Summer Day Camps

The recommendations set out in these Information Sheets are for guidance purposes only. Unlike the Special Measures Orders, failure to strictly comply with these guidelines would not result in a municipality being liable to a fine or penalty. However, this does not mean that these guidelines can be ignored.

As noted above, in assessing whether a municipality was negligent in its implementation and delivery of COVID-19 health and safety protocols, a claimant must establish that the municipality did not do what a reasonably prudent municipality would have done in similar circumstances. In making such determination, a court will likely look to the Special Measures Orders, the Information Sheets and other guidance issued by the Provincial Government and determine that a reasonably prudent municipality would follow those orders and guidelines as closely as possible in the circumstances. However, what is reasonably prudent for one municipality may not be reasonably prudent for another. This will depend on a variety of factors, including the number and size of facilities in the municipality, budgetary constraints and staffing resources.

A further relevant consideration is that Canadian courts have generally recognized that municipalities have immunity from liability resulting from true policy decisions, provided that they are not irrational or taken in bad faith.³ If, for instance, because of budgetary or staffing constraints, a municipality adopted a policy that it would only sanitize municipal facilities once per day, this may be a perfectly tenable defence to a claim from an individual who contracted COVID-19 at that municipality’s facility, provided that the policy was properly adhered to. A municipality would not be entitled to rely on this immunity if such a decision was made at the operational level, however.

Develop a COVID-19 policy and communication strategy

In order to best insulate itself from liability to potential COVID-19 related claims, municipalities should review the relevant Special Measures Orders, Information Sheets and other guidelines issued by the Provincial Government to formulate and adopt its own COVID-19 policy. The more closely that the Provincial orders and guidelines can be followed, the greater the likelihood that the standard of care will be met. However, in certain circumstances, it may be entirely defensible to deviate from the Provincial guidelines. For example, it may be reasonable to adopt a policy of sanitizing and monitoring less those municipal facilities which are used less frequently or are deemed to be lower risk for COVID-19 transmission. A policy might also contemplate that certain facilities will not open if COVID-19 safety protocols cannot reasonably be implemented.

Once a COVID-19 policy is adopted, municipal staff must strictly comply with it. We would strongly recommend the use of checklists and logs to document inspections, cleanings, and other monitoring efforts.

Further, communication with residents and patrons of the facilities is essential. The policy should be posted on the municipality’s website and communicated through the municipality’s social media and other communication channels. Additionally, posting of COVID-19 signage in accordance with templates recommended by the Provincial Government is a good practice and ought to be implemented.

Confirm insurance coverage

Finally, municipalities should contact their insurers to confirm that their general liability insurance policy does not contain an exclusion for epidemics, pandemics and/or health emergencies. Provided that there is no exclusion, insurance coverage should be available in the case of a COVID-19 related negligence claim (although we caution that the nature of any claims a municipality may face, and accordingly, whether there is insurance coverage is difficult to predict). If the insurance policy does contain such an exclusion, the municipality should make inquiries to see if coverage is available.

¹ Ryan v Victoria (City), [1999] 1 SCR 201.

² https://www.gov.nl.ca/covid-19/information-sheets-for-businesses-and-workplaces/

³ Knight v. Imperial Tobacco Canada Ltd, 2011 SCC 42.

This article is provided for general information only. If you have any questions about the above, please contact a member of our Municipal group.

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