Legal departments and courts impacted by pandemic-related backlogs
Another key factor in the lack of COVID -19 related force majeure claims is, quite simply, the fact that general counsel’s offices and legal departments are operating at reduced capacity, with few practical opportunities to navigate similarly overwhelmed court systems that have also had to cope with a radical shift in operations. Many courts around the world have been closed for long periods, while others are only accepting cases in certain areas of law. Further, governments in some jurisdictions have enacted legislation specifically intended to prevent an onslaught of cases arising from the COVID -19 pandemic. One example of this is Singapore, which has suspended claimants from lodging bankruptcy or insolvency petitions. In the United Kingdom, the Financial Conduct Authority (FCA) has continued to intervene to help claimants ensure their business interruption insurance claims would be resolved without the need for extensive litigation.
One result of the aforementioned court system slowdown has been that parties to a range of disputes have opted for alternative dispute resolution measures, such as conciliation or mediation. However, even if force majeure was the basis for these types of disputes, the settlements reached would not be widely known as they are typically confidential.
Research has also shown that there was little to no enforcement cases resulting from arbitrations (which are themselves confidential) related to force majeure disputes in key jurisdictions.