CONSEQUENCES OF THE LACTALIS CASE IN FRANCE ON LIABILITY FOR DEFECTIVE PRODUCTS
By Pierre-Yves Rossignol, HERALD
Distributors that do not withdraw from sale products reported as defective may be prosecuted under criminal law and subject to civil proceedings with the manufacturer.
The years 2017 and 2018 were marked by the infected LACTALIS milk scandal in France. Lactalis is a French food company. It is the world's largest cheese processing group and the number-two food group in France, after Danone.
It was identified that 53 infants in France suffered from salmonellosis in late 2017 after eating a product for children – mainly products branded Milumel or Picot – which came from the Craon factory in Mayenne.
The recall process was chaotic and various failings were discovered that had caused the contamination. After several weeks of crisis, in mid-January, the group – known for its culture of secrecy – had withdrawn all of its infant formula in the offending factory, and production had to be suspended for six months.
Overall, a little more than 300 criminal complaints were lodged with the public health department of the Public Prosecutor of Paris, including those filed by four consumer associations (such as the consumer protection associations UFC-Que Choisir and Foodwatch).
It is suspected that the company had taken no steps whatsoever to remedy the discovery of salmonella when carrying out its own product checks.
If the facts are proven, the company managers could be prosecuted for fraud/forgery. There may also have been shortcomings in their production control system.
Such actions are punishable under criminal proceedings with seven years’ imprisonment and a fine of 750,000 euros if the offence or attempted offence resulted in the goods becoming hazardous to human or animal health.
The products’ removal from sale and recall was ordered by Minister Bruno Le Maire on 9 December 2017.
In this case, large retailers (including Edouard Leclerc) had to acknowledge that they did not comply with the decree ordering the products to be withdrawn, but rather that they distributed the disputed batches to their shopping centres throughout France and sold the infected milk.
Article L 532-3 of the French Consumer Code punishes the failure to execute the measures ordered pursuant to Articles L. 521-4 to L. 521-16 (administrative orders to recall the products) and L.521-19 to L. 521-22 with two years’ imprisonment and a fine of 15,000 euros. The amount of the fine may be increased to 30,000 euros if the goods or services in question are, or may become, a hazard to public health or consumer safety.
Article L452-5 of the French Consumer Code punishes the failure to spontaneously withdraw products as soon as the operator becomes aware that a product may be harmful to health:
The offence is punishable with five years’ imprisonment and a fine of € 600,000 where an operator fails to carry out the withdrawal or recall under the European regulations on food safety, whilst being aware that a product or foodstuff, other than an animal product or foodstuff containing an animal product, which it has imported, produced, processed or distributed, is harmful to human health; or that feedstuffs of animal origin or containing animal products which it has imported, produced, processed or distributed, is hazardous.
This amount may be increased – in proportion to the benefits deriving from the offence – to 10% of average annual turnover, calculated over the last three annual turnovers known at the time of the facts.
Moreover, if there are victims who have incurred personal injury or death, the common law of the Criminal Code may also be invoked:
- Involuntary damage to human integrity.
The criminal penalties are also applicable to legal entities.
After more than nine months of extensive preliminary inquiry, a judicial investigation was opened on 09 October 2018. The public health department of the Public Prosecutor of Paris decided to assign the investigation to an investigating judge – having completed in late September the analysis of thousands of documents seized in mid-January during the seizures from four sites of the French milk giant – determining that the investigation should "continue in another legal framework” that was more suitable.
A judicial inquiry was opened against X for "deception about the essential quality of the goods", "unintentional injuries resulting in incapacity for work lasting three months or fewer” and “failure by a food industry operator to carry out the procedures for withdrawing or recalling a product that is harmful to health".
It seems that the managers of the producer and distributors did not weigh up their common risk during this crisis. They will have plenty of opportunities to defend themselves as part of the investigation process conducted by the investigating judge and then before the courts overseeing the case.
At the end of 2018, a parliamentary inquiry committee, suggested streamlining of state departments, with centralised governance in the food safety sector. A single authority should be put in place, instead of the three ministries (Ministry of Health, Economy (Bercy) and Ministry of Agriculture).
Pierre-Yves RossignolHERALD, Paris, France
T: +33 1 53 43 1515
HERALD (formerly GRANRUT) is a well-established, independent law firm created in 1957. HERALD’ lawyers always try to bring fresh ideas, innovation and best practice in its core practice areas. Two Granrut partners have been elected Bâtonnier of the Paris Bar.
Admitted to the Paris Bar in 1990, Pierre-Yves is a partner of Herald Avocats Law Firm since 1997, and specialises in litigation and arbitration disputes in the field of business law, insurance, and defective products. He monitors litigation proceedings in the area of defective product liability on behalf of corporations and insurance companies.
Published: April 2019 l Photo: auremar - stock.adobe.com