In the rarified circles of classical liberal/libertarian debate, I come across debates about whether companies could or should enjoy statutory limited liability (protecting beneficial owners of said from being sued for their wealth if there is an issue.) Like intellectual property rights (patents, copyrights, trademarks, etc) this is a fraught area creating fierce debate among people who normally agree on a great deal.
LL laws protect people who have beneficial ownership from losing everything short of the clothes they stand in. Another, perhaps related limitation of exposure, however, stems from emergency situations, such as the pandemic. I think this is an issue that eventually is going to bite.
Consider the way that the drug manufacturers who developed and sold COVID-19 vaccines, such as Pfizer and Astra-Zeneca, were last year granted exemption from liabilities by the governments of various countries, such as the UK.
The companies, perhaps understandably given the relative speed with which they were approved to distribute the vaccines, and the urgency of the situation, wanted an assurance they wouldn’t be sued. So they got those protections. The attitude at the time seemed to be that we were in a sort of war. Consider this WW2 example: Rolls Royce did not want to be sued by people if its Merlin engines in the Spitfire, Mosquito and other aircraft went wrong. Makers of radar equipment and all the rest of it did not want to be sued. So possibly the thinking last year was the same about vaccines. The threats of class-action lawsuits would kill innovation stone dead.
As the months, and now years, go by, the balance I think is going to shift, particularly if the severity of the virus in terms of its lethality is shown to have declined not just because of vaccines but down to development of immunity in populations, and other factors. In that case, is it really credible that makers of vaccines, and distributors of said, can escape the constraints of normal commercial/criminal liability?
After all, we have seen how, in the US, the Sackler family – owners of the Purdue Pharma business – have been hit by mass lawsuits over opioids. Although it won immunity to further lawsuits, as reported here.
Forgive me, gentle readers, if these comments appear disjointed. I was chatting to an investment banker about all this, and he agreed that the immunity these manufacturers have carved out should not be open-ended. At the very least, lawmakers, if they are doing their job, and want to build trust in vaccines and so on, ought to consider how to address this issue. For some people, the immunity of these firms might be a reason why they refuse to take the vaccine. The Law of Unintended Consequences.
On a perhaps more positive tack, the fact that vaccines were rolled out and approved with such speed does suggest that when the heat is on, bureaucracy can be removed as much as possible. And this begs the question about how much regulatory protection and how much bureaucracy to oversee it is really necessary.