Unclear liabilities for hotels

Many state governments requisitioned hotels to be attached to hospitals, but failed to account for the excessive legal liabilities that were to fall upon a hotel during its untraditional functioning. Dheeraj Nair, Partner at J Sagar Associates, discusses some of these legal nuances.

Hotels, already privy to personal information, now have access to more than such information they would have had hitherto. These details constitute ‘sensitive’ personal data under the Information Technology Act, 2000. There are statutory prescriptions for the collection, storage and dealing of such sensitive personal data under the Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011, along with other requirements such as consent to collect data as well as the requirement to communicate the intended purpose and recipients.

Most hotels that have not been able to update their privacy policy or disclaimer/consent forms to be aligned to the existing exigencies and ensure strict compliance with the statutory compliances are at risk. Any lapse may attract a legal liability on such hotels even though they have thrown open their doors to accommodate the medical exigency of the company. Hopefully, the enforcement agencies will be flexible in their approach so as to not incriminate well-intended hotels that stepped up during the time of crisis.

Medical waste disposal

Hospitals have a host of environmental law compliances which may differ from the standards that may apply to hotels. Distinguishably, hospitals also have an obligation under the Bio-Medical Waste Management Rules, 2016, which prescribe safe disposal of bio-medical waste. Traditional use of hotels may require strict compliances for bio-medical waste, but as extensions of a COVID-hospital, they will now also be in possession of bio-medical waste such as contaminated human tissue, contaminated bedding with blood or body fluid, cotton swabs, etc.

In such a situation, will the hotel be liable for lapses in proper disposal of bio-medical waste when in fact its traditional operations never required such compliances? Though it seems reasonable to assume that a hotel can easily be distinguished from a hospital, there remains an apprehension of the loss and damage that may be caused merely by engaging in the prolonged, expensive and reputation-damaging process involved in establishing this distinction before the concerned regulator/authority.

Medico-legal liabilities

Hotels do not have the infrastructure to provide the specialised care available in medical facilities. Neither do they have the requisite sterilisation and sensitisation processes that are adopted in healthcare centres. The internal hotel policies and SOPs only provide for staff training and guest management during and after the pandemic. There is obviously a lack of medical protocols due to the lack of expertise, and in this case, also the lack of government support and initiative.

One could assume that the suspected/patients occupying hotel premises are the liability of the hospital in which they are being treated, but what is the guarantee than in case of a lapse the medical negligence claim will not array the hotel for joint and several liability?

What is to happen in a situation where a consumer makes a claim for damages for contracting the virus during his stay at the hospital, or the hotel environment deteriorating his health conditions? While the enforceability of such tortious claims in Indian courts is questionable, mere institution of a claim would be enough to submerge a hotelier into protracted legal proceedings.

Ministry’s SOPs

The SOPs of the Ministry of Health contain some unreasonable requirements on private hotels and restaurants, to impose isolation on suspected patients, which may not be feasible on the Indian public without governmental intervention. But, most significantly, the SOPs evidence the government’s missed opportunity to address the liability concerns, thus failing to loop the lacuna on liability in case of lapses during hotel quarantine.

Reputational hazard

The lack of information or protocols for certification of disinfection when the hotels are returned to their actual operators and owners, may require hotel owners to invest substantial sums in reputation management. Stigma further impacts revenue, an issue which is aggravated due to the lack of a formalised revenue model discussed between the government, the hospital and hotels. Therefore, the requisitioned hotels, which are already cash-strapped, are presently operating with no estimation of their operational revenue, but bleeding extra expenses on sanitisation operations. This is further worsened by the fact that the government is disrupting regular business operations when it does not requisition the maximum capacity of a hotel, but only partial occupancy. The empty rooms will, understandably, lose preference for business and leisure travellers.


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