Businesses face risk for liability for defective goods every day. A recent important incident is the Listeriosis outbreak that crippled businesses and suppliers in the processed meat industry. The consequences are reaching far beyond just the businesses who are directly involved – farmers who supply livestock to abattoirs, who in turn supply carcasses to the relevant businesses. Even businesses supplying packaging materials are affected.
Section 61 of the Consumer Protection Act (CPA) states that businesses are liable for defective goods. It goes further to state that all businesses in the supply chain can be held liable for damages. It is for this reason that businesses in the food industry must comply with strict health regulations. It is equally important that strict terms and conditions are in place between the various suppliers in the supply chain to ensure that each business complies with the regulations in order to limit the risk of incurring liability.
Because of the CPA’s far reaching implications, and consumers becoming more aware of their rights, it becomes increasingly difficult to avoid liability by shifting the blame. Businesses have an obligation to protect their industry by supplying products that are safe for consumer use, which is why a consumer orientated approach is encouraged. Failing to do this may lead to more consumers reporting a supplier’s failure to comply to the National Consumer Commission (NCC), which will invariably trigger the NCC’s duty to ensure safe products are sold to consumers. This includes the Product Recall Procedure referred to in Section 60 of the CPA.
The implications of the Listeriosis outbreak will, in all likelihood, still have a long term impact on businesses. It has, for example, prompted the NCC to issue a Safety Recall Notice to suppliers, with further investigations to follow which may lead to stricter regulations in the food industry.
These risks are, however, not limited to the food industry. All businesses, regardless of the industry, must ensure that safe products are produced in order to avoid the same fate certain businesses have already faced.