Ontario’s Bill 218 proposes limiting liability for COVID-related claims

On October 20, the Ontario government introduced Bill 218, the Supporting Ontario’s Recovery Act. If passed, Bill 218 will provide liability protection to individuals, businesses and other organizations that make an honest effort to follow public health guidelines against COVID-19 exposure-related lawsuits.

What you need to know

Bill 218 would provide for the following:

• Protect workers and businesses. Bill 218 would bar COVID-19 exposure-related claims against any individual, corporation, or other entity that made a “good faith” or “honest” effort to act in accordance with public health guidance and laws relating to COVID-19.
• Apply retroactively. This legislation’s protections would be retroactive to March 17, 2020, when Ontario first implemented emergency measures as part of its response to the COVID-19 pandemic.
• Limitations and carve-outs. Bill 218’s liability protections would not apply to:
  • claims based on gross negligence or operations that were required by law to be closed; and
  • claims brought by an employee or worker involving exposure or infection that occurred in the course of employment.

Scope of protections

If passed, Bill 218 would provide broad protections to individuals, corporations, other entities and the Ontario government from COVID-19 exposure-related lawsuits.

Section 2 provides protection from liability for COVID-19 exposure-related claims. Claims based “directly or indirectly” on an individual being potentially infected with or exposed to COVID-19 are barred if the defendant acted in accordance with applicable public health guidance and laws, or made a good faith effort to do so. “Public health guidance” is defined broadly to encompass any advice, recommendations, directives and instructions (regardless of the form or manner of communication) from any level of government, health officials, and applicable regulators.

Bill 218’s protections do not extend to:

• any act or omission constituting gross negligence;
• any act or omission that occurred while a law required operations to be closed, in whole or in part; and
• lawsuits brought by an employee against their employer.

Standard of conduct: Good faith effort; no gross negligence

Bill 218 defines “good faith effort” as including “an honest effort, whether or not that effort is reasonable”¹. What exactly constitutes a “good faith” or “honest” effort will likely be a fact-specific determination. This determination will likely be a focal point of COVID-19 lawsuits given the multitude of potential considerations.

Gross negligence requires a higher level of misconduct than ordinary negligence. Gross negligence has been defined by the Supreme Court of Canada as a very marked departure from the required standard of care or a “very great negligence”²—the vast majority of business operations that implemented measures with the intent of following public health guidance, even if those measures were insufficient, would not be found to have been grossly negligent.

Bill 218’s good faith effort threshold is a lower standard of conduct compared to that required under comparable legislation in British Columbia. The British Columbia government initially passed a Ministerial Order in April that provided similar protections from liability for people providing an essential service. Unlike in Ontario, in order to be eligible for the liability protections under the BC order, the worker needed to provide the essential service in accordance with all applicable emergency and public health guidance, or reasonably believe that they were doing so. The BC Legislative Assembly has since passed the COVID-19 Related Measures Act, which more broadly aims to limit any damages related to the COVID-19 pandemic unless those damages are caused by gross negligence. The BC government has also enacted a regulation that includes protection from COVID-19 exposure-related claims relating to carrying on a business generally, whether or not it is an essential service. This regulation repeals the previous Ministerial Order, but the “reasonable belief” standard remains the same.

Scope of protected parties

Bill 218 would apply broadly to any acts or omissions by a “person”, whether they are providing essential services or not. Bill 218 defines a “person” as any individual, corporation or other entity, including the Ontario government. This scope is similar in effect to BC’s equivalent legislation discussed above.

In the United States, various legislative measures have emerged, some protecting all businesses from lawsuits brought by people who contracted COVID-19 (for instance, Idaho’s House Bill No. 6 or Executive Order 20-33 in Arkansas), some applying only to specific businesses or industries. The Federal CARES Act extends protections to manufacturers of personal protective equipment, for example, while other legislative provisions apply only to health care facilities (such as New York’s Emergency or Disaster Treatment Protection Act). In comparison to these legislative efforts, Ontario’s proposed statute is broader in scope.

Impact on existing claims

Bill 218 would apply retroactively. Any existing proceeding that is directly or indirectly based on an act or omission protected under section 2, that occurred on or after March 17, 2020, will be deemed to have been dismissed, without costs, on the day Bill 218 comes into force.

Implications for businesses and other organizations

Bill 218 would provide welcome protections for organizations operating during the pandemic. While the exact standard of “good faith” or “honest” efforts is not entirely clear, organizations can take steps to help ensure they benefit from Bill 218’s protections. Organizations should continue to monitor and implement COVID-19 guidance from all three levels of government and applicable regulators. Organizations should also be sure to document these efforts and any other measures implemented with a view of limiting individuals’ risk of COVID-19 exposure.

If passed, this legislation may incentivize businesses reluctant to open to do so and give businesses that have been operating some peace of mind. Organizations hesitant to operate as a result of contradictory guidelines (e.g., conflicting guidance regarding the required personal protective equipment to operate) can rely on subsections 2 (2) and (3), which provide that the protection from liability applies regardless of any conflict or inconsistency in the applicable public health guidance or laws, no matter the degree of specificity.

Given the broad nature of these protections, it is also possible that this legislation will make insurers more comfortable offering liability insurance to organizations for pandemic-related risks, as has been contemplated by the American Bar Association in relation to similar U.S. legislation.

Implications for employers

Notably, Bill 218 would not apply to any claims by an individual in respect of an actual or potential exposure to or infection with COVID-19 that occurred in the course of employment, or the performance of work for, or the supply of services to, a person. Thus, these protections would not extend to protect employers from COVID-19 exposure-related claims from employees or contractors. See Torys’ guidance relating to COVID-19 and the workplace: employer obligations and new regulations impacting employers.

_________________________

¹ Bill 218, s. 1 (emphasis added).

² Cowper v. Studer, [1951] S.C.R. 450 (S.C.C.); McCullough v. Murray, [1942] S.C.R. 141 (S.C.C.). See also the recent discussion of these cases in Société Telus Communications v. Peracomo Inc., 2014 SCC 29.

Read all our coronavirus-related updates on our COVID‑19 guidance for organizations resource page.

To discuss these issues, please contact the author(s).

This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

For permission to republish this or any other publication, contact Janelle Weed.

© 2024 by Torys LLP.

All rights reserved.