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Avoiding courtroom drama

September 2, 2004
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Understanding the ins and outs of lawsuits is imperative to safeguarding your business.

Richard F. Stier
How can you tell when a lawyer is lying? Other lawyers look interested.

But, seriously, all of us should be interested in what lawyers have to say, when it comes to food safety-related lawsuits.

At a meeting of the Institute of Food Technologists in Las Vegas, Messrs. William Marler and Dennis Stearns from the Seattle-based law firm, Outbreaks, Inc., offered a short course entitled, "Liability and Foodborne Illness: Understanding the Law Can Protect Your Business."

The firm represented companies such as Jack-in-the-Box, Odwalla and Sizzler, as they faced high-profile foodborne illness lawsuits. I took the course and realized one important fact right away: Understanding how a good lawyer can help you and, perhaps equally important, how you can help yourself in such cases is critical to protecting your business.

Who is the client?

There were a number of issues that came up during the course that should become gospel for food processors. First, if your company has the misfortune of causing illness or injury, be sure that the attorney or firm that is representing you is truly representing you. All too often when a food company has a problem, it turns the case over to the insurance company. Unfortunately, the insurance company does not always have the best interests of the insured in mind. And, since the insurance company may select the law firm, the firm may feel that its client is the insurance company and not the food company.

According to Marler, in the early days of the Jack-in-the-Box case the attorneys representing the chain were more interested in helping the insurance company cut its losses, which ended up hurting the chain in the long run. This mentality became obvious to the management at Jack-in-the-Box and they fired the first firm and brought in a new one. Jack-in-the-Box ensured the victims were cared for, acknowledged that it had a problem and demonstrated that it was willing and determined to fix it. The end result? Jack-in-the-Box is now considered a trendsetter for developing and implementing programs aimed at assuring food safety.

Determine what happened

Once a lawsuit has been filed and begins to go forward, there is discovery, which is the phase when the plaintiffs gather information about the case. They are allowed to request information from the defendant and this information may support the suit. Here, you need to look closely at what happened. How did the illness occur? Were there manufacturing, processing or distribution errors? If your company has been implicated in an outbreak and records, inspections and other information show that there was a greater commitment to the bottom line than to food safety; it would be wise to settle the case immediately. By neglecting to disclose information, companies often dig themselves into deeper holes from which it is difficult, if not impossible, to recover. Further, failure to disclose information is against the law.

Make a commitment

If your company is at fault, the settlement must also be accompanied by a company-wide commitment to improve operations to assure that such an event will not occur again. Taking this tack turns a positive into a negative. The classic example is the Tylenol outbreak of 1982. Johnson & Johnson acknowledged fault, recalled product and announced plans to replace capsules with caplets. The company did this quickly and publicly, and its sales barely suffered. On the other hand, a failure to act decisively and honorably can have long-term adverse effects on business. The lesson here: Make sure that injured parties are adequately compensated quickly and without hassle, announce plans to improve and follow through with those plans. A failure to do so will hurt the bottom line.

If you're involved in a case, be sure that you and your lawyers have the same goals, thoroughly investigate what happened, and, if your company is at fault, make a commitment to prevent the same incident from reoccurring.

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