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Law and justice in the distribution of burdens in the COVID-19 pandemic

We all benefit from the measures taken to contain the pandemic. But the way the disadvantages associated with them are distributed is very unequal indeed. On the (difficult) task the law faces in ensuring fair compensation. By Professor Sebastian Martens

The Corona pandemic is affecting us all – in previously unknown ways. From time to time, in the new series 'Passau University Perspectives', researchers at the University of Passau will be taking a view of current developments as seen from their discipline.

In order to prevent a major outbreak of the COVID-19 pandemic in Germany, the state and society have restricted social life and all activities connected with it in recent months to an extent that was unprecedented and would, until very recently, have been absolutely unthinkable. Without these measures, however, the disease would certainly have caused a much higher number of fatalities and also done great harm in other ways. In view of the fact that, potentially, any of us can be infected with the virus, and in view of the fact that we cannot be sure whether or how badly it would make us ill if we were, or how hard a general collapse of the healthcare system would hit us, we all benefit very considerably from the measures taken to contain the pandemic.

Costs only incurred by relatively few

Having said all that, the disadvantages of the reactions of the state and society to SARS-CoV-2 have affected people in Germany very unequally. Being forced by the restrictions to stay at home for several months hits a large family who live in a small flat harder than the owners of a large house with a garden. Naturally, the closure of schools and kindergartens does not put much stress on an old-age pensioner; on the contrary, he's glad to have some peace and quiet if he lives in the vicinity of such an institution and the closure rids him of the children's noise. Some enjoy a welcome time out from the stress of everyday life, whilst others get lonely and miss their contacts. These immaterial advantages and disadvantages of the reactions to SARS-CoV-2 are difficult to measure. A complete stocktake of society as a whole is probably not feasible. However, the measurable, quantifiable material impacts of the crisis are in the foreground of the political debate too.

Prof. Dr. Sebastian Martens

Professor Sebastian Martens, M.Jur. (Oxon.)

researches civil law and European private law and law history

How can the law contribute to a fair distribution of burdens in times of crisis?

How can the law contribute to a fair distribution of burdens in times of crisis?

Professor Sebastian Martens, M.Jur. (Oxon.) has been holder of the Chair of Civil Law, Roman Law, European Private Law and European Legal History at the University of Passau since 2015.

Representative surveys have shown that (so far) the great majority of the population have been spared such material, i.e. financial damage from the crisis. At the end of May, 86 per cent of those surveyed in the ZDF Politbarometer said that they did not fear any deterioration in their own personal economic situation, or if so, not much. But even among the remaining 14 per cent, it is likely that only relatively few people will really have been hit hard. Millions of workers on short time, for example, have had to put up with (temporary) wage reductions, but they are not confronted by ruination as many self-employed people are. It is not unusual for the latter to have lost all their sources of income while still being under obligation, at least in part, to pay their expenses.

Those who enjoy the advantages of a measure should also bear its disadvantages

A traditional principle of justice, and one that makes sense as soon as you hear it, states that advantages should only be allowed to be enjoyed by those who must also bear the associated disadvantages. In the interest and to the advantage of the community, it may be necessary for individuals to sacrifice their rights and legally protected interests and be subjected to a greater burden than others. In accordance with the above-mentioned principle of justice, Section 75 of the introduction to the General State Laws for the Prussian States of 1794 specified that 'the state be required to compensate those who are obliged to sacrifice their special rights and advantages for the good of the community'. Even today, there is a general entitlement to claim compensation from the state based on that law, which comes into operation when a citizen is subjected to an excessive, specific burden and this is not covered by any more specific rules.

Entitlement to claim against the state probably only in exceptional cases

The state measures with which public life has been so severely restricted to contain the pandemic since March 2020 have essentially been based on Section 28 (1) of the Infektionsschutzgesetz (IfSG, Infection Protection Act). According to that, the authorities responsible can adopt the 'necessary protective measures' if and for as long as they are required to prevent the spread of infectious diseases. When the legislators drafted Section 28 of the IfSG, what they had in mind, above all, when using the phrase 'necessary protective measures', was measures to be taken in respect of diseased persons, persons suspected of having a disease and persons suspected of being infectious. No one imagined that one day, Section 28 of the IfSG would have to be used to effect a general restriction of the rights of the population as a whole to freedoms, the vast majority of whom were under no suspicion of having been infected with the virus at all.

The IfSG thus only allows entitlements to claim compensation in cases of the kind the legislators had in mind when they passed it, for example in case of measures affecting diseased persons (Section 56), or when the state has recourse to the concrete assets of private individuals in its efforts to combat an epidemic (Section 65). The IfSG does not provide for the compensation of people who are not suspect at all but suffer losses in their income or other pecuniary disadvantages as a result of protective measures. Perhaps the police laws of the federal states could provide a way out here. Those laws, under certain conditions, provide for entitlements to claim compensation for so-called non-disturbers, i.e. persons who are not responsible for some danger to public or private goods, if the state takes action against them and they suffer damage as a result. There is currently some controversial debate among juridical experts as to whether persons who have suffered financial damage as a result of state measures to contain the pandemic actually have such entitlements under the police laws. Having said that, the courts cannot be expected to acknowledge such claims in more than a few exceptional cases anyway.

Just burdening for all would not be politically enforceable 

Even if it would only really be just and fair to compensate for damage in the cases of those who had been hit particularly hard – of whom there would only be relatively few – we would, in total, be talking about sums here which were far larger than the rescue packages that are currently being put together. One of the reasons why the government's measures to combat the pandemic have met with so much approval was that the majority of the population could only benefit from the advantages in terms of health protection, hardly having any disadvantages to bear, whilst only a relatively small minority suffered major damage. Even linguistically, there is a constant obfuscation of the connection between the political measures and the damage caused by them with reference being made to the 'consequences of the COVID-19 pandemic', as if the restaurants, hotels or businesses themselves had become infected with the virus. Thus, the state aid programmes seem more like generous support in some kind of natural disaster, not like compensation for damage caused by the state and society themselves through measures taken to avert an impending natural disaster. Full compensation for the damage and the burdening of all which would be associated with it, which would produce a fairer synchronisation of advantages and disadvantages, would hardly be politically enforceable, because then the majority, spared thus far, would have to tighten their belt very considerably too. So the many thousands of millions intended to boost the economy in the form of loans, lost subsidies or investments, will not alter much of the fact that many citizens (though they are only a minority) are forced to cope with the damage they suffer alone.

A law to mitigate the consequences in civil law, but not a very helpful one

In many cases, however, it may not be at all clear who has suffered what damage. Many contractual relationships beg the question of which party must bear the risks of the pandemic. In a given concrete case, this question is to be answered in accordance with the regulations of private law. Now the government has also modified private law by enacting a new act designed to mitigate the consequences of the COVID-19 pandemic. With this act, however, the government was not aiming to bring about any change in the respective distribution of risk in contracts, but merely to provide temporary help in certain particularly important contracts for those who had difficulties in meeting their contractual obligations as a result of the pandemic. Until 30 June, landlords are not allowed to issue tenants with notice to leave if the latter were not able to pay their rent because of the pandemic, providers of basic utilities are not allowed to cut off their supplies of electricity, gas or water if their customers have to cease making payments because of the pandemic, and extra time has to be allowed for payment if necessary in consumer's loan agreements.

Private law serves to correct injustices between individual citizens. That renders it unsuitable to alleviate injustices which are independent of them and affect society as a whole.

Professor Sebastian Martens, Universität Passau

Sadly, it cannot be expected that general wealth will suddenly break out on 1 July, enabling the citizens who have been under protection until then to settle the debts they have accumulated. It follows that the above-mentioned interventions in private law will not be very effective in the long term, and this fact has now obviously been recognised by some parts of the government. There are already calls for the extension of the protective measures by three months, for example for tenants. However, that would not solve the problem either, but merely push it further into the future, and the debtors concerned would be faced with an even larger mountain of debt on 1 October.

The risk of the pandemic in contract law

Private law serves to correct injustices between individual citizens. That renders it unsuitable to alleviate injustices which are independent of them and affect society as a whole. Disasters such as the COVID-19 pandemic are only significant for private law if and to the extent that they have an impact on concrete legal relationships between individual citizens. In the current crisis this may above all be the case if parties to a contract failed to consider the risk of a pandemic when they concluded the contract, and if the value or significance of parts of the contractual performance have now changed as a result of the pandemic in such a way that it would not be reasonable to expect one party or the other to adhere to the terms of the contract unchanged.

Because of operating bans by the authorities, for example, many commercial tenants have not been able to use the premises they were renting for months on end. Of course, the reasons for these bans did not lie in the behaviour of the tenants or have anything else to do with them in person; it was simply that the authorities aimed to prevent too much social contact and thus contain the spread of the Corona virus. But this objective could also have been achieved by forbidding landlords to open their premises to the public. According to the general regulations, the landlords would have had to bear the full risk of any such prohibition of use and the rent would have been reduced to zero. But again, according to those selfsame general regulations, the tenants would have been impacted by the risk of the operating bans that were actually issued and would have to pay the rent in full.

Given the fact that, for the parties to the rental agreements, both the pandemic and the type and direction of the measures announced to combat it were coincidental and unforeseeable, the norms that apply under normal circumstances must, for once, relinquish their priority and the damage caused by the pandemic be split fifty-fifty between the parties in commercial rental agreements pursuant to a special rule (Section 313 of the BGB 'Interference with the basis of the transaction'). Distribution of the damage in this way will also come under consideration in many other contractual relationships, since it is more or less certain that no one foresaw the risk of the COVID-19 pandemic or the political and social reactions to it.

Summary: small-scale justice?

It is thus probably the case that the law will not be able to ensure fair distribution of the damage caused by the pandemic over the whole of society, but it would be quite an achievement if it could at least establish fairness between individual citizens.