Product Liability And Recall

At the end of July 2007 a supplier was found liable to its manufacturer customer for the presence of Para Red in the chilli powder it had supplied, even though the court accepted that the presence posed no risk to health.

The High Court decision highlights:

The protection that the Sale of Goods Act affords to manufacturers against their suppliers in the face of a product recall

The importance of the product specification set out in the contract

The need for those in the manufacturing industry (particularly the food industry) to look carefully at the terms of any product liability insurance that they have purchased to ensure that they have adequate cover to protect them against such claims.

To view the article in full, please see below:

Full Article

At the end of July 2007 a supplier was found liable to its manufacturer customer for the presence of Para Red in the chilli powder it had supplied, even though the court accepted that the presence posed no risk to health.

The High Court decision highlights:

The protection that the Sale of Goods Act affords to manufacturers against their suppliers in the face of a product recall

The importance of the product specification set out in the contract

The need for those in the manufacturing industry (particularly the food industry) to look carefully at the terms of any product liability insurance that they have purchased to ensure that they have adequate cover to protect them against such claims.

The Facts

The claimant was a manufacturer of foodstuffs incorporating chilli powder and the defendant was its supplier. In April 2005 the Food Standards Agency ("FSA") was alerted to the presence of the prohibited dye Para Red in chilli powder and various foodstuffs into which the chilli had been incorporated. Although the levels of Para Red were extremely low and unlikely to be a danger to the public, the FSA adopted a zero tolerance policy and advised that all contaminated products should be recalled and destroyed.

In line with the FSA's advice, the claimant recalled and destroyed its product and in the process incurred significant expense and loss. It was only subsequently, due to intense lobbying from the food industry, that the FSA later amended its advice so that it no longer required the withdrawal from sale of foods unless the level of Para Red was in excess of 0.5ppm. The levels of contamination in this case were below this threshold but the change in the FSA's stance came too late to avoid the...