And what is that argument? Asking because we were reviewing our customer credit insurance policy at work today (in case our customers go bankrupt because of the virus and can’t pay), and the policy says that we’re not covered in case of “an act of God.”
Well in short covid-19 has a comparable illness life-cycle as pneumonia or the common flu.
In december 2019 the National Institute of Medicine in the US publised this study on influenza respiratory mortality:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6815659/
Results
We estimated an average of 389 000 (uncertainty range 294 000-518 000) respiratory deaths were associated with influenza globally each year during the study period, corresponding to ~ 2% of all annual respiratory deaths. Of these, 67% were among people 65 years and older. Global burden estimates were robust to the choice of countries included in the extrapolation model. For people <65 years, higher baseline respiratory mortality, lower level of access to health care and seasons dominated by the A(H1N1)pdm09 subtype were associated with higher influenza-associated mortality, while lower level of socio-demographic development and A(H3N2) dominance was associated with higher influenza mortality in adults ≥65 years.
Granted, it should be noted that covid-19 is NOT the flu, just comparable. The mortality patient group is identical to influenza and presents identical symptoms. But we do not for example have any data on herd immunity, long term recovery effects etc. There is currently no vaccine that is ready for mass market, but a human trial study have started in the US and China, and Japan are having success treating patients with ebola medication, pulling the recovery time down from 4.5 days to just 2.2-2,5, but everything is still very early days.
The argument is that the outbreak, when compared to the similar respiratory illness, des not
yet qualify as a force majeure event. The measures being put in place that affects everyone right now is not an act of god as the contracts stipulate, but an act of man. Or to be more precise, an act of democratically elected governments.
Essentially,
most employees and employers are not in the risk group for covid-19 and can technically still go to work for most part. Most people don't even know they have been infected,
We're all part of a global undertaking to stop the spread of a dangerous respiratory disease, but so far it doesn't even sniff the scale of the one that makes its round every winter. It should be noted that I fully support the quarantine and I have not left my house since it started, but I don't believe force majeure necessarily qualifies.
Important to note is that there is no generic definition of Force Majeure in British common law that I can find, so the wording of the contract is important.
The very key factor when enacting the Force Majeure clause is wether an action or performance becomes impossible. Simply having less business does not actually qualify. For example: Gamestop having less customers because of a government advice not to leave the home is NOT a Force Majeure event. Airlines being banned from flying by the same governemnt, IS a Force Majeure event as it makes operation impossible.
Following the MERS and SARS outbreaks, force majeure contracts would usually include the wording "pandemic" or "outbreak". Act of God is wildly open to interpretation. But in this spesific case I guess it depends on what your customers actually do. But as long as they are not physically hindere from doing business, they probably don't have a strong case.
