Libel/Food Contamination. When food isn't quite so glorious

Incidents of food and drink contamination, whether malicious or accidental, are never out of the news for long. Only recently it was reported that Marks & Spencer had launched a campaign to recall certain chocolate cakes on the same day that Sainsbury's were recalling wafers because of possible contamination. The two incidents were unrelated.

Such recalls present an interesting legal problem for manufacturers and suppliers.

Under the Sale of Goods Act 1979 (as amended by the Sale and Supply of Goods Act 1994), when a vendor sells goods in the course of a business, there are implied terms that the goods are of satisfactory quality and are fit for their intended purpose. Therefore, if the goods supplied are unsatisfactory, the seller (for these purposes the manufacturer or supplier) is liable to their buyer for breach of contract.

What usually happens in contamination cases is that a consumer identifies a contaminant in a single tin or bottle they have bought and this casts a shadow over the whole batch.

Imagine, for example, that a consumer finds a metal staple in his apple pie, and this is traced to a fault in the production line. Let us also assume another half a million pies have passed along the production line over a period of time. None of them has a single staple in it, but there is no way the manufacturer can be absolutely certain of this. So the question is whether these perfectly good pies are satisfactory and fit for their purpose.

The burden of proof falls upon the buyer, who may be a wholesaler or supermarket. But what exactly does the buyer have to prove? After all, they cannot show that each pie is contaminated.

The Sale and Supply of Goods Act 1994 says that goods are satisfactory if “they meet the standard a reasonable person would regard as satisfactory, taking account of any description of the goods, the price (if relevant) and all other relevant circumstances”. These circumstances include freedom from minor defects and safety.

The legal conundrum we are faced with is whether the seller is in breach of contract to the various buyers, even though there is nothing wrong with the pies supplied. The exception to this is the buyer who bought the pie with the staple in it.

Consider the position if a buyer cannot decide whether to withdraw the pies from their shelves, recall any sold and claim the seller is in breach of contract. They believe the risk is negligible but in order to protect themselves they phone their lawyer. How many lawyers would advise the buyer to take the risk? Without better information the lawyer would have to advise a recall and advise losses be claimed from the supplier. It is hard to argue such action is unreasonable.

Whatever the legal advice, most reputable buyers will take whatever steps are necessary to preserve their name, even if they cannot be certain of recovering the costs of recall from their suppliers.

The buyer would have to consider ways of mitigating his loss. Some products can be reprocessed while in other cases a checking procedure could be developed. Equally, some goods may be unsalvageable.

The seller can, therefore, be liable despite supplying good food. The potential exposure for manufacturers and suppliers is considerable, but elements of this risk can be controlled. This is usually done by a combination of contractual limitations and production systems which minimise the number of products which fall under suspicion once the alarm is raised.