Law and Alters: the COVID-19 class action against the People’s Republic of China

As this is a fast moving topic, please note that this article is current as at 27/03/20. For further information, please contact Ben Aram.

This article was co-authored by William Finnerty, Trainee Solicitor, London.

COVID-19 has resulted in a number of unexpected outcomes and has already spurred a litany of lawsuits, from Freedom of Information suits to claims against cruise line companies. Add to this growing list a claim against the Chinese Government.

On 13 March, a group of small business owners in Florida filed a class-action lawsuit in the US District Court against the People’s Republic of China (PRC) and its various provincial government agencies and ministries for allegedly failing to contain the spread of COVID-19. Elsewhere, an individual in Texas has brought a claim under similar grounds, for the value of US$20 trillion.

Alters v People’s Republic of China [13.03.20]

The claimants collectively allege that the PRC and its related government entities, acting from their own economic self-interest and looking to safeguard their status as a world superpower, failed to report the outbreak of COVID-19 as quickly as they could have. The claimants further allege that the PRC deliberately underreported cases of COVID-19 and failed to contain the outbreak despite their knowledge of its severity.

How can a country be a defendant?

Nation states are typically insulated from claims by the sovereign immunity doctrine, which gives them absolute protection over actions by claimants from other nation states.  However, claims against countries are not impossible – with claims almost exclusively brought in connection with acts of terror. Under US law, nations that commit acts of terror waive their sovereign immunity. Whether the global pandemic of COVID-19 could be categorised as a form of bio-terror remains to be seen, although it is unlikely that it will meet this threshold. 

Comment

Only time will tell whether, and if so how PRC will choose to respond to what is certainly an ambitious claim. Given the mounting criticism of the Chinese Government from key US figureheads such as President Donald Trump, Frank Biden and former US Senator Joseph Abruzzo (who is reportedly a financial backer of this claim), there is clearly an appetite to hold PRC to account. It would indeed be surprising if the disruption of the reciprocal peace treaty of sovereign immunity was another unexpected outcome of COVID-19.  

In the highly unlikely event that a successful judgment against PRC is obtained, it would also be interesting to see how the claimants will contend with the hurdle of enforcement to realise the significant damages sought.

Focus area

Coronavirus (COVID-19)

As developments unfold, Kennedys experts across the world advise on what the COVID-19 pandemic means for you and your business.

Go to focus area