UK: Product Liability And Recall

Last Updated: 4 September 2007
Article by Anthony Hobkinson and Simon Garrett

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:

  1. The protection that the Sale of Goods Act affords to manufacturers against their suppliers in the face of a product recall
  2. The importance of the product specification set out in the contract
  3. 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:

  1. The protection that the Sale of Goods Act affords to manufacturers against their suppliers in the face of a product recall
  2. The importance of the product specification set out in the contract
  3. 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 products here being recalled and destroyed.

The issues in this case were: 1) whether the supply of chilli containing levels of Para Red below that which the FSA subsequently permitted was a breach of an express or implied term of the contract of supply; and 2) whether it was a breach of the Colours in Food Regulations 1995 ("the Regulations").

The court held that there had been both a breach of the Regulations and the terms of the contract. The court held that Para Red was not a permitted colour under the Regulations and the fact that only a small amount was present in the chilli was irrelevant. It was there and that was sufficient to establish liability. Interestingly the court accepted that its construction of the Regulations meant that the FSA’s subsequent conduct effectively condoned the sale of chilli that breached the Regulations but that this was a pragmatic decision based upon considerations of trade.

The court also held that there had been a breach both of the express terms and implied terms of the supply contract. The express term in the contract that required supplied products to be "free from foreign and extraneous matter" was held not to be a term of art within the food industry. Para Red was held to be foreign or extraneous because it was not there naturally and not supposed to be there. "Free from" meant absolutely free from.

As to the implied terms of the contract, the sale of chilli powder contaminated with measurable (although harmless) quantities of Para Red was found not to be reasonably fit for its purpose or of satisfactory quality, contrary to section 14 of the Sale of Goods Act. This was because products manufactured from it were liable to be posted on the FSA website and to be subject to recall as a result of advice or instruction from the FSA. The fact that the FSA subsequently relaxed its advice was of no consequence: the attitude of the FSA at the date of sale was one of zero tolerance to contaminants such as Para Red and the Judge held that the FSA had not been mistaken in its original stance to advise a recall.


Although the FSA altered its position after the recall, the Judge nevertheless found that the presence of any level of Para Red was a breach of the Regulations and a breach of the terms of the contract of supply. It illustrates the need for suppliers and buyers a like to check the precise terms of their contracts: a specification will need to be met exactly unless there are expressly stated tolerances.

Finally, it once again highlights the importance for all firms involved in the manufacturing industry, particularly the food industry, to check the scope of their product liability cover. Although this case was not concerned with the scope of insurance cover, in the absence of a financial loss extension, most product liability policies will only indemnify the manufacturer/supplier where their product causes actual physical damage to third party property or personal injury. This latest decision has left untouched previous Court of Appeal authority that held that the mixture of a contaminated ingredient with other ingredients to form a new product is not damage in this sense, but the creation of a defective product. Depending upon the wording of the supplier’s product liability policy, its contractual liability to a manufacturer for the consequences of product contamination may not be covered. In those circumstances it may be worth considering either a separate extension to the product liability policy or purchasing stand alone product recall cover. In either case the small print of the insurance policy is important.

Further reading

Hazelwood Grocery Limited –v- Lion Foods Limited [2007] EWHC 1887

Messer UK Limited & Anr –v- Thomas Hardy Packaging & Anr [2002]
EWCA Civ. 549 (The Bacardi Breezer case.)

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 31/08/2007.

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