What is happening?
Covid-19 cases hit a new record of 19,724 on Wednesday creating split opinions on how to manage the virus. [1] SAGE, the Scientific Advisory Group for Emergencies, released a report stating that a two-week circuit breaker at the end of October could halve covid-19 deaths between now and the end of the year. [2]
Based on mathematical models, deaths could be reduced between 29% and 49%. Supposedly, a circuit breaker could rewind the clock by 28 days. Clearly, there is a lot of uncertainty and it all depends on the trajectory of the epidemic. [3]
A two-week circuit breaker would entail tighter restrictions on people in order to buy some time whilst implementing other controls. Like in March, this aims to relieve pressure on the NHS. In some Liverpool hospitals, 95% of intensive care beds are full and half of these are covid-19 patients. As a result, hospitals are pushing back non-urgent operations. [4]
The hope is that a circuit breaker will break the cycle of transmission, throwing the cycle into reverse. Questions are being raised about whether there is too much uncertainty and whether the measure is proportionate. Economic and societal pressures need to be balanced.
What are people saying?
Professor Graham Medley, a SAGE member, says that it is too late to initiate a circuit breaker and more severe restrictions may be necessary. [5]
Labour leader, Kier Starmer, has shown great support for a circuit breaker. He states that the Prime Minister’s current strategy has failed, insofar that the track and trace system and local restrictions simply haven’t worked. Boris Johnson hasn’t ruled out a circuit breaker but wants to avoid the ‘disaster’ of another lockdown at all costs. Starmer labelled the Prime Minister ‘an opportunist.’ [6]
The First Minister of Wales has announced a fire-break lockdown, also known as a circuit breaker, but what is it?
Rishi Sunak, Chancellor of the Exchequer, has warned that a circuit breaker would cause needless damage to parts of the country with low virus rates. There would be irreversible damage in the form of jobs lost, businesses closed, and children’s education harmed. [7]
Significantly, it seems that health experts and doctors agree with the concept of a circuit breaker to protect the NHS. Matt Hancock and Michael Gove are particularly concerned about the surge in cases and appear to be the most supportive of a circuit breaker. Interestingly, a YouGov poll has shown that a circuit breaker is supported by 68% of Britons. [8]
Is the circuit breaker likely to work?
New Zealand had a month-long lockdown which very quickly brought cases under control. Their ability to deal with the virus effectively has been widely recognised and praised. Israel implemented a national lockdown which comes to an end this week. They have stated there are some preliminary signs of success, although infection cases still continue to rise.
Northern Ireland has initiated a four-week lockdown which will come into force Friday 16th October, while Wales too appear to be following suit. [9]
Currently, it is clear that Boris Johnson’s weighing scales are heavy on the side of protecting the economy. The effectiveness of his three-tier system will show in the weeks to come. Starmer warns that if we don’t act now, we will ‘sleepwalk into a long and bleak winter.’ Claudia Paoloni, President of the Hospital Consultants and Specialists Association, states that failure to act may result in a prolonged full lockdown in the Spring.
The legal impact
Mayors of Liverpool and Greater Manchester have shared that they would be in support of a circuit breaker as opposed to tier three restrictions in their regions. The Mayor of Greater Manchester has threatened to take legal action, should Manchester be placed into tier three like Merseyside.
Analysts at Dutsche Bank say that a two week lockdown would cost the economy around £1bn. This would result in further redundancies and weaker output elsewhere in the economy. Significantly, this disruption will prolong the industry’s recovery even further. [10] Unemployment and bankruptcy rates will rise in the UK as a result.
Commercial law firm DWF has also released a profit warning, stating that the pandemic has coincided with the final quarter of the financial year which is the most important period for financial performance. [11] Similarly, the hospitality industry’s most lucrative time of the year is Christmas-time.
Law firms will be increasingly giving advice to struggling businesses. Restructuring and insolvency companies will see a boost in work as a result of the hospitality industries struggling. Litigation services may also experience a surge in work if businesses challenge the government’s restrictions. [12]
Written by Hannah Travis
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#CliffordChance #DLAPiper #SlaughterandMay #IrwinMitchell #HoganLovells
References:
[1] ‘UK doctors and health experts back Covid-19 ‘circuit breaker’ (The Guardian, 2020) https://www.theguardian.com/politics/2020/oct/15/uk-doctors-and-health-experts-back-covid-19-circuit-breaker <accessed 15 October 2020>
[2] ‘Covid: Two-week circuit breaker ‘may halve deaths’, report says’ (BBC news, 2020) https://www.bbc.co.uk/news/health-54538278 <accessed 15 October 2020>
[3] ibid 2
[4] ibid 1
[5] ibid 2
[6] ‘Coronavirus lockdown: Boris Johnson says national circuit-breaker can’t be ruled out’ (The Independent, 2020) https://www.independent.co.uk/news/uk/politics/coronavirus-lockdown-boris-johnson-circuit-breaker-latest-update-b1035578.html <accessed 15 October 2020>
[7] ‘Johnson sticks to UK Virus Plan Despite Calls for Lockdown’ (Bloomberg, 2020) https://www.bloomberg.com/news/articles/2020-10-13/boris-johnson-under-pressure-to-order-circuit-breaker-lockdown <accessed 15 October 2020>
[8] ibid 7
[9] ‘Coronavirus circuit breaker lockdown: What is the science behind it and has it worked elsewhere?’ (Sky News, 2020) https://news.sky.com/story/circuit-breaker-lockdown-what-is-the-science-behind-it-and-has-it-worked-elsewhere-12104003 <accessed 15 October 2020>
[10] ‘Hospitality circuit breaker lockdown could wipe £1bn off the UK GDP, research shows’ (City A.M., 2020) https://www.cityam.com/hospitality-circuit-breaker-lockdown-could-wipe-1bn-off-uk-gdp-research-shows/ <accessed 19 October 2020>
[11] ‘Commercial law firm DWF issues profit warning in Covid-19 update’ (BusinessLive, 2020) https://www.business-live.co.uk/professional-services/commercial-law-firm-dwf-issues-17991062 <accessed 19 October 2020>
[12]‘Circuit Breaker of Hearts: UK Hospitality and Travel Shares Tumble After Hints of Second Lockdown’ (littlelaw, 2020) https://www.littlelaw.co.uk/2020/10/03/circuit-breaker-of-hearts-uk-hospitality-and-travel-shares-tumble-after-hints-of-second-lockdown/ <accessed 19 October 2020)
Disclaimer: This article (and any information accessed through links in this article) is provided for information purposes only and does not constitute legal advice.