Virus chaos may be unprecedented, but the legal implications aren’t
The economic impact of COVID-19 might not be the only lingering mess from the global pandemic. There will also be a legal minefield to navigate, as LIONEL HOGG explains.
On 24 June 1902, King Edward VII underwent an emergency appendectomy.
The King survived the procedure but his need to convalesce generated legal squabbles all over London.
The most famous was at the suit Mr Paul Krell, who owned premises on Pall Mall offering an outstanding view of the forthcoming processions for the King’s coronation. A royal enthusiast, Mr Henry, let Mr Krell’s flat for the days on which it had been announced that the coronation processions would take place, but the King’s medical procedure forced postponement of the festivities. Mr Krell wanted his rent regardless and Mr Henry did not want to pay it – and he wanted his deposit returned.
The agreement was a simple exchange of letters confirming the dates, rent and care of the premises. The letters said nothing about the coronation, but the court found, on all the evidence, that viewing the coronation was the foundation of the contract. Mr Henry was relieved of his obligation to pay the balance of the rent.
But the law does not always provide the same result. Another royal enthusiast, Mr Chandler, had apparently also decided that Pall Mall provided a fine viewing platform for the coronation procession and similarly agreed to rent other rooms nearby on the same day. Mr Chandler paid his rent in advance and the court did not allow him to recover it, even though it was clear that he wanted the rooms to view the procession.
As we all realise, a good coronation is not merely a procession and, for Edward VII, there was also a planned naval review. The cancellation of the naval review had citizens litigating about paying caterers for refreshments and the use of a steamship. The caterers were unable to force payment, but the boat owner received his fee.
All these cases contributed to the development of the legal doctrine of “frustration”, which might or might not apply when unforeseen events occur and disrupt perfectly good plans.
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Frustration is a legal minefield. It is devilishly difficult to establish and, if it does apply, the results can be arbitrary depending on when your obligation to pay arises. Different rules apply in different states. Depending on the nature of the contract, there might be other ways to recover payment for goods or services partly supplied. And some agreements will have “force majeure” clauses, to deal with unforeseen events, which may or may not help depending on what the clauses say.
Just as the King’s plans were thrown into turmoil by a pesky appendix, nobody bargained on the coronavirus either. The problem is that the coronavirus will impact more than one mere mortal and the potential number of legal squabbles will swamp what occurred around the turn of the last century. Lawyers everywhere will be dusting off Mr Krell’s case for guidance.
Lionel Hogg is a Partner at Gadens Lawyers
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