Challenging corporate giants

A fishy challenge to the horsemeat scandal emerged last week, with the news that one in seven of the fish sold in shops, restaurants and in your local fish and chip shop is not what you believe it to be. A report by the UK Food Standards Agency revealed mislabelling and further deception of consumers, upstaging the horse meat scandal, if only for a short time.

Last month Tesco placed the first of three double page 'apology ads' in all of the UK's best selling newspapers, from tabloid to broadsheet. In the first of this series, entitled 'What burgers have taught us', Tesco told us that, in terms of meat sourcing and supply chains "they really do need to do better".

While these adverts are pitched at winning back a consumer who may feel they have been wronged, Tesco can be safe in the knowledge that under the current UK legal system such confessionals are unlikely to be used against them in any court of law.

Contrast the system in the US, where lawyers are equipped with an 'opt out' collective redress system which enables them to bring claims on behalf of a defined group without the need to identify individual group members, such that all those who fall within the group will be bound by the result unless they actively opt out of the case. This system is now being used in the context of food litigation for the first time, by Don Barrett, a US attorney with impeccable group action credentials, having forced the tobacco giant Phillip Morris to admit that it knew cigarettes were addictive and to pay the medical costs of victims. Mr Barrett's class action alleges that food corporates are misrepresenting their products as 'natural' or 'healthy' when they are no such thing: Barrett's claim follows a string of false starts in the context of group action against food manufacturers, including the McLawsuits, Perlman v McDonald's Corp., 237F. Supp. 2d 512 (SDNY 2003) in 2002. In Perlman two young McDonald's consumers alleged that their obesity and related health problems were caused by McDonald's. The claim was dismissed on the basis that there is a known association between fast food and obesity and that these consumers chose to dine at McDonald's. However, the case did succeed in triggering a series of headlines internationally, in which 'obesity litigation' was tipped as the next tobacco and in educating lawyers that such litigation would have to be shaped outside of a PI framework.

Succeed where others have failed

Mr Barrett's case makes use of the longstanding FDA rules on food labelling to bring an action in which the class is defined as every person who purchased one of the alleged misbranded products within the last four years. Individual damages will be minimal of course, but Barrett claims that 25 per cent of products in the US are misbranded such that the scale of the collective damages awarded may well match the billions won through the tobacco lawsuits. If Mr Barrett succeeds it is likely that 'Big Food' corporates in the US will move quickly to close the floodgates and, as a result, Mr Barrett may well succeed where the regulators have failed, in compelling a change in labelling practices.

For the UK group litigation lawyer, without access to a US style opt-out mechanism, group food litigation remains conspicuously off the menu. If it is proven that consumers in the UK have been defrauded by food producers and supermarkets in the recent horse meat scandal, no collective action can be taken against any company because of the shortcomings of the current group litigation system in the UK. While Civil Procedure Rule (CPR) 19.6 permits a person to bring a claim on behalf of others who have the "same interest in a claim", in 2010 the Court of Appeal upheld a High Court judges' decision to strike out an attempt by claimants to use CPR 19.6. as the basis for a US-style 'opt out' class action (Emerald Supplies Limited & Anor v British Airways [2010] EWCA Civ 1284).

Competition cases

On 29 January, the Department of Business Innovation and Skills published its proposal to introduce legislation in the UK that would facilitate opt out collective actions, but only in relation to competition cases. While the published proposals are very limited in scope, the CBI reportedly commented that in adopting the proposals "the government has let the litigation genie out of the bottle by adopting US style collective actions". As it stands, given the very narrow application of the new opt out rules, this statement is somewhat premature, however, all those committed to consumer empowerment will also hope that it is prescient. There can be little doubt that had the recent horse meat scandal taken place in the US, supermarkets would have taken out more insurance against consumer action than double page advertising space in a series of newspapers.

Mr Barrett's historic role in tobacco litigation, and his pioneering role in food litigation, should serve as a reminder that group legal action is more effective in changing the behaviours of corporate giants than government regulation. If the government is really serious about forcing change in the way that our food is supplied, labelled and sold, then properly equipping UK lawyers with a workable collective redress mechanism would not be a bad place to start.

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