COVID-19 and illness compensation claims against your business

Advice  |   3 June 2020

Whether you own a business which has been operational or closed during the coronavirus lockdown, health and safety issues are uppermost in all our minds as we consider how to adapt each business to ensure it survives.

Whether you own a business which has been operational or closed during the coronavirus lockdown, health and safety issues are uppermost in all our minds as we consider how to adapt each business to ensure it survives. Lives are at stake among employees and volunteers, contractors and subcontractors, customers and suppliers.

‘We don’t know what the long-term health risks are in relation to COVID-19, but we can expect to see claims for compensation coming from a number of corners,’ says Edward Lewis, a commercial disputes solicitor with Thackray Williams. ‘We cannot stress the importance of thorough record keeping in regard to risk assessments, key decisions, health and safety policies and procedures, PPE, training and incidents in the event that any claims materialise alleging that someone caught COVID-19 via your business.’

Government guidance

Guidance from the Government continues to appear, for example, on 11 May 2020 BEIS published ‘5 steps to working safely’ with recommendations to:

  • carry out a COVID-19 risk assessment;
  • develop cleaning, handwashing and hygiene procedures;
  • help people to work from home;
  • maintain two metres social distancing, where possible; and
  • where people cannot be two metres apart, to manage the transmission risk.

At the moment there is a lot of uncertainty over how the disease is transmitted, for example with different distance rules in different countries, but over time these will become clearer. The track and trace technologies are already identifying hotspots in countries, and once information is known and made public, it will be important to demonstrate that you responded appropriately.

Business owners should review each announcement and record any decisions and the rationale behind them, as they may need to rely on this information in the event of a claim.

Risk assessment

The BEIS guidance recommends all employers carry out a COVID-19 risk assessment using the guidance from the Health and Safety Executive in consultation with workers or trade unions.

You also need to think of the risks to your customers and suppliers. Many organisations outsource elements of their businesses and cleaning is a common area for outsourcing, often on a casual basis. This will need to be rethought carefully and proper contracts put in place, for an outsourced cleaning company may have to be joined in a claim where a business believes that it contributed to the negligence.

Most importantly, a documented risk assessment will be a useful tool to defend your business from any claims that may appear in the future. However, you should seek advice from your solicitor first before deciding what information, if anything, should be disseminated.

Testing and health information

As test kits become more affordable and results can be obtained quickly, then regular testing may become an option. But deciding who to test, and how this information will be used is a potential minefield for companies, as health data is regarded as ‘sensitive’ personal data and you could find yourself in hot water with healthy customers if they feel their health data is being used inappropriately.

There are stringent requirements that apply to the processing of health data under the General Data Protection Regulations, and you should seek legal advice on the controls that you need to put in place to manage this in a compliant manner.

On receipt of a claim

It is inevitable that some business owners will be on the receiving end of claims from people alleging they were infected with COVID-19 at work or on your premises. No doubt, claims management companies are already working on their advertising campaigns.

The burden of proof lies with the person bringing their claim, and this is a civil burden on the balance of probabilities. Prior to the lockdown, most people led busy lives and it would have been very difficult to pinpoint a point at which the disease was contracted. However, in a new world where many people will be cautious and will keep their movements to a minimum, it may be easier for some to identify where infection occurred – particularly if this is later supported by track and trace data.

Section 11 of the Limitation Act 1980 provides that a claim for personal injury has to be brought within three years. However, there is an exception to this rule where it is only later that someone realizes that their injury is significant. If so, then a claim can be brought anytime within three years of the date of knowledge. We do not know what could be the long-term health effects for people infected with COVID-19. It may be that the virus causes other health issues in the future or exacerbates an existing medical condition. There is a long-stop provision of 15 years after which all claims are time barred.

Business owners who have good compliance procedures and record keeping, are likely to be in a better position than others. Nevertheless, there remains a risk that a judge may decide that someone was infected because of your actions or negligence, with the result that you become liable to pay compensation.


Where someone has died as a result of COVID-19, then a business could face a claim from the executors under the Fatal Accidents Act 1976. Such a claim could also seek compensation for those family members dependent on the dead person.

Where the person who died is a worker, if there is a workplace pension scheme in place that pays out or offers a pension to a surviving partner, while the partner could also claim compensation, credit would have to be given for these pension benefits.

In cases where the Director of Public Prosecutions gives consent, business owners could face prosecution for a death under the Corporate Manslaughter and Corporate Homicide Act 2007. This specifically creates potential criminal liability where a duty is owed by an ‘occupier of premises’. The 2007 provides for no specific defences but rather leaves it to a jury to decide the extent to which the evidence shows that there were attitudes, policies, systems or accepted practices within a business that were likely to have encouraged any corporate failure. Evidence of a criminal conviction can be used to reinforce claims for compensation under the Civil Evidence Act 1968.

Business owners facing such a claim should seek advice from an expert dispute resolution solicitor as soon as they receive notification of a potential claim.