Home » The Financial Risks of Breaching a COVID public health order

The Financial Risks of Breaching a COVID public health order

Posted by Keith Spencer | 26 October 2021 | Legal Developments

Media recently reported that a Sydney father and his two children broke lockdown and travelled to Byron Bay plunging the Northern Rivers region of NSW into a snap lockdown on the 14th of August after he tested COVID-positive. The lockdown was not lifted until the 10th of September. Dozens of businesses in Byron Bay, Bangalow, and Newrybar were listed as venues of concern and were forced to close.

In July, three removalists were charged by Police for travelling from Sydney to Molong after one removalist was informed by NSW Health he had tested positive for COVID-19. Police and Emergency Services Minister David Elliot responded stating “This thoughtless act has now placed our regional communities in NSW at the greatest risk so far with this pandemic”. 

These stories raise the question: can people who know they’re infected with covid-19 and disregard public health orders be sued in negligence for damages sustained because of the resulting lockdowns and consequential business closures?

To establish a claim in negligence, it must be established that the defendant owed the plaintiff a duty of care which the defendant breached and the breach caused the plaintiff damage which was reasonably foreseeable and not too remote.

A duty of care can arise in two situations. The first is where the relationship between the defendant and plaintiff falls within an established duty category, such as doctor/patient relationships. The second is where the relationship falls outside of the established categories but it was reasonably foreseeable that injury would occur and there are salient features that give rise to a duty of care. The landmark case of Donoghue v Stevenson in 1932 laid the foundation for modern tort law. The court held that one must take reasonable care to avoid acts which it is reasonably foreseeable may cause injury, loss or damage to your neighbour. Who is considered your neighbour? In that case, Lord Atkin said “The answer seems to be – persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts which are called in question.”

The plaintiff must also establish that the defendant breached that duty of care. In determining whether a breach has occurred, the court will assess a defendant’s conduct against the relevant standard of care. The court will consider whether the risk of injury to the plaintiff was reasonably foreseeable, whether the risk was significant and whether a reasonable person in the defendant’s position would have taken precautions against the risk of harm. In determining whether a reasonable person would have taken precautions, the court will consider the probability of the harm occurring, the likely seriousness of the harm, the burden of taking precautions relative to the risk and the social utility of the activity that creates the risk.

Finally the plaintiff must establish that the defendant’s breach has a direct and causal link to the harm and damage caused. At common law, this is referred to the ‘but for test’ – the idea that ‘but for’ the defendant’s negligence the plaintiff would not have suffered injury or loss.  In the context of a breach of a Covid lock-down order,  the plaintiff would not have contracted Covid, or had to close their business, or the community forced into lockdown causing widespread loss of turnover and loss for multiple businesses, had it not been for the infected person or persons breaching the lockdown.

To prove causation can be difficult. The onus is always on the plaintiff to adduce the evidence to prove their case on the balance of probabilities. For example a plaintiff may have to prove a lockdown would not have occurred but for that particular person or persons breaching a public health order. If there is another possible reason that cannot be reasonably excluded the plaintiff will probably fail. Expert evidence may be required. Each case will depend on its own particular facts and applying the law to those facts.

There are some thresholds for being able to claim damages for personal injury under the Civil Liability Act and the defendant may also escape liability, even where a breach has occurred, if an intervening event ‘breaks’ the chain of causation (a ‘novus actus interveniens’). Arguably a public health order issued by NSW Health could be seen as a break in ‘causal chain’. However this could, and in our view would, more likely be considered as putting the general public including the defendant on notice of the dangers of breaching the order meaning that the defendant would be hard-pressed to argue the damages were not reasonably foreseeable

The possibility (perhaps more accurately the probability) of infecting someone or a lockdown being imposed as a result of an individual breach of public health orders is clearly reasonably foreseeable, as is the loss of profit and income as a result of the lockdown for the general business community, most noticeable the small retailers, restaurants, hairdressers and other service providers. A court would be likely to conclude that a reasonable person who was aware they were infected would exercise precautions as required by NSW Health, that is, it a reasonable person would self-isolate upon a positive Covid test, and not travel to any area where they were not permitted to be. A state-wide lockdown as a result of multiple infections in the same region would probably break the chain of causation but if an outbreak were traced to a person or persons breaching a lockdown, such person or persons would be exposed to be sued.

Lastly, the plaintiff will need to establish the extent of the loss for which a defendant should be held responsible and liable for (‘scope of loss’). Should the defendant’s liability extend to all loss?

Whilst not conclusive, if a person knows they are COVID-positive and breaches public health orders thereby causing a lockdown requiring businesses to close and those businesses suffer consequential financial loss, that person may well be liable in negligence under Lord Atkin’s ‘neighbour principle’ and be ordered to pay damages.  We shall see if any such cases emerge.

For more information please contact Group Principal Keith Spencer on krs@nexuslawyers.com.au

Nexus has changed the way legal services are delivered: Better, Faster, Simpler
Nexus is a law firm of depth and innovation with a national footprint, led by a peer group of like-minded senior professionals. We deliver solution-focused legal services without the pretense. Our clients enjoy direct access to senior lawyers, who are trusted advisors and use our advanced group systems. This allows us to deliver time and cost efficiencies to clients. At Nexus, we deliver the right advice our clients need at the right time to make a real difference in their business.
 This publication is © Nexus Law Group and is for general guidance only. Legal advice should be sought before taking action in relation to any specific issues. 

Related Articles

Webinar: Key COVID-19 insights learnt for the Australian construction industry

13 August 2021 | Business Structuring |

As part of our joint webinar discussion series, the CFO Centre & Nexus Construction discuss the options available to a company negatively impacted by COVID & lockdowns

COVID19 Construction Update: NSW construction workers permitted to leave Locked Down LGAs, under strict restrictions

12 August 2021 | Civil Contractors and Construction |

NSW Govt. announces amendment to the public health order, allowing construction workers to leave & work outside Locked Down LGAs, under strict requirements. 

OUR AWARDS