I had a discussion with an attorney recently wherein the topic of COVID-19 and foreseeability arose. In the hypothetical being discussed, the claimed wrongdoing occurred mid-2019 and its economic impact continues today. In mid-2019, COVID-19 was not reasonably foreseeable, so my initial thoughts included the consideration of minimizing or correcting for the COVID-19 economic impact. COVID-19 is novel (you caught the pun there, reader, didn’t you? ) – it will impact or wrongly skew economic damage results – I need to be careful here.
Upon reflection, however, I took the moment to ask the ever-important question, “but for the wrongdoing, what otherwise would have happened from an economic or business perspective”? In the likely damage scenario, the impact of COVID-19 (in this instance, an unforeseen increase in demand) would play out in both the should-have-been and actual worlds. While not foreseeable, it’s likely just another macroeconomic factor in the model. While the COVID-19 effect would likely skew lost sales upward, its “skewing” of profits occurs in both the should-have-been and actual worlds. Because the COVID-19 impact occurs in both “worlds”, no normalization would be necessary.
Depending on the facts of the matter, the COVID-19 question will likely be a damages consideration on matters being tried years from now.