The coronavirus pandemic is creating challenges for all sectors of the economy, including for various business professionals. While some steps have been taken to mitigate immediate concerns, professionals must remain aware of their obligations and be mindful of potential pitfalls in this uncertain environment.
For example, the legal profession, which typically relies on in-person appearances, meetings and depositions, is rapidly turning to working remotely. Courts in many jurisdictions have taken significant steps to reduce the need for attorneys to make in-person appearances and have extended deadlines to allow parties time to adjust. New York’s state courts have postponed all non-essential court functions including empaneling new jury trials, have directed all preliminary and compliance conferences to be adjourned or conducted remotely, and have announced a policy of taking all civil motions on submission or conducting oral arguments by remote means. As of March 16, 2020, all eviction proceedings and pending eviction orders have been suspended statewide until further notice. While the federal courts have not issued nationwide guidance, individual courts are postponing trials, oral arguments and conferences, and individual judges have issued blanket orders directing all depositions to be conducted by remote means and extending discovery deadlines.
Likewise, accountants are being given somewhat of a reprieve by the IRS in what is typically their busy season. On March 17, Treasury Secretary Steven Mnuchin announced that the tax deadline will be delayed for three months, until July 15, 2020. Taxpayers are being given 90 days to pay income taxes due on up to $1 million in taxes owed, with corporate filers getting the same length of time to pay amounts due on up to $10 million in taxes owed. During the three-month deferral period, taxpayers will not be subject to interest or penalties. California Governor Gavin Newsom has issued an executive order delaying the tax deadline for 60 days, and other states have indicated that they may follow the IRS’ lead in extending state filing deadlines.
While these policy changes are useful, professionals must nonetheless keep abreast of developments in their fields to avoid errors that could harm their clients. For example, statutes of limitations remain in place, and attorneys must take care not to miss unmovable filing deadlines. Attorneys should not simply assume that all deadlines have been extended and should reach out to opposing counsel for stipulated adjournments as necessary. Moreover, professionals working from home must continue to abide by their obligations regarding client confidences and personal information, and must maintain secure electronic systems.
Unfortunately, professionals may not be able to avoid all work-related risks stemming from the current crisis. In any crisis where significant financial losses are felt, clients may seek to reallocate losses to the professionals who advise them for failing to adequately foresee or protect them from catastrophic losses. In the months and years after this pandemic passes, we anticipate that there may be an increase in professional liability claims arising out of these losses, as claims are asserted based upon the failure to include adequate force majeure provisions in contracts, failure to properly advise clients as to labor and employment compliance during the pandemic, or the failure to advise clients to obtain adequate business interruption insurance.
Please contact your attorney for guidance on how best to protect yourself from these concerns.
