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Backlog of Cases Awaits a Court System Stalled by COVID-19

Lawsuits are threatened but courts aren't hearing them

Monday, June 1, 2020

New York City wedding for 350 guests was set for May, but the biggest inadvertent party-pooper—not on the guest list—was Gov. Andrew Cuomo. Enforcing a government shutdown in response to the COVID-19 pandemic, festivities ground to a halt before things even started.

Was anyone surprised?

The happily-ever-after event was on a collision course with government restrictionsWith 33,000 people dead and dying in the tri-state area due to COVID-19, mass gathering are still offlimits despite the country’s attempts to return to normalcy, and the catering company refused to refund the bride and groom a $30,000 deposit.

It’s a cautionary tale during a pandemic—and a glimpse of what cases one may expect to see in the courts in the coming weeks—says attorney Anna Aguilar of New York’s Aguilar Bentley LLCLawsuits are cropping up as people are attempting to recoup money for everything from missed sale of stock opportunities to business interruption insurance claims. Only, in some cases, the courts are closed.

“This whole situation is like a hurricane hitting the legal system,” Aguilar says. “The first couple of weeks during the shutdown was eerily calm—like the eye of the storm—and we all knew something powerful was coming. Now it’s hit and litigation’s picking up exponentially  but can’t go anywhere.”

Or at least not until May 25, when the New York State courts finally opened for “non-essential” filings.   

Log jams

Evidence of the court system’s strain was the toilet flush heard round the world, as the US Supreme Court recently started hearing arguments againremotely.

For state and federal courts around the country, the timetables and protocols are anything but consistent. And if a case isn’t considered essentiallike child custody or a restraining orderforget coming to the courthouse.

Isome courts, you’re not allowed to file anything right now,” Aguilar says“You can tell someone youre going to sue their pants off until you’re blue in the face, but you actually can’t.”

Sometimes you have to have the difficult conversation with your client that you can’t actually file anything right now.

As a “big law trained” attorney handling complex commercial matters for Fortune 500 corporations and the like, Aguilar says filing any sort of paperwork varies, especially now as state’s are tenuously opening up.

Until recently, you couldn’t file a case in New York, but in the Southern District of Texas there’s seemingly been more or less normal operations, not impacted as much,” she says. Additional layers of confusion to the process await, as judges themselves are establishing their own set of COVID 19-related rules.

“You have to be really careful,” Aguilar says. “Before we were required to provide certain judges with two hard copies of all papers that were electronically filed, but now if you send a piece of paper into the courthouse, it’s almost considered criminal. You could easily walk into a landmine if you aren’t reviewing each court and each judge’s rules surrounding COVID-19, she says.

Force Majeure 

Of special note is the contractual paperwork itself, specifically the Force Majeure clause. That’s the fine print embedded in most contracts that seeks to remove liability through exceptionsbe it an Act of Godan asteroid or a pandemic.

As Aguilar says, what’s written in the fine print may be the difference between having a legal leg to stand on, or having nothing at all. Now living and working in a world that’s essentially shut down, she says nothing is too farfetched to list as an exception, including government executive orders and shutdowns. Still, there are hardly any guarantees.

“It feels like each week the courts are modifying and expanding the scope of what’s permitted,” she says. “You should be able to file non-essential complaints, particularly in New York because filing the complaint doesn’t require the court to do anything initiallybut sometimes you have to have the difficult conversation with your client that you can’t actually file anything right now.”

The best approach, she says is keeping an open line of communication with clients so that know the reasons behind the delays. It’s also beneficial, she says, to always do a costbenefit analysis of any casefactoring in legal fees and damages—to see if a case is worth pursuing.

“We don’t want our clients to get in a situation that doesn’t make sense,” Aguilar says, “I think many lessons will be learned when all is said and done. Reaching out to your clients in a direct and personal way during this time will help them get thought this period and foster good relationship for years to come.

For the latest stories on how the legal community is responding to COVID-19, please follow Vanguard’s dedicated LinkedIn page. The stories are hosted on Vanguard’s blog.

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