High noon for Tiger Brands as summons issued in listeriosis class action lawsuit

Photo by Leila Dougan

The deadly listeriosis outbreak, which hit South Africa hard, is starting to play out before the courts. South African human rights attorney Richard Spoor, who is well-known for his razor-sharp tongue, is hauling Tiger Brands to court by the tail. He is asking the high court to award members of a class action lawsuit punitive or constitutional damages.

See earlier report here: SA’s listeriosis victims want accountability and justice from class action suit

More than a year after South Africa’s largest food producer Tiger Brands recalled its ready-to-eat processed meat products and closed its production facilities over the deadly listeriosis outbreak, the company is gearing up for a big and nasty fight.

Tiger Brands nailed its colours to the mast on Wednesday saying it intends to fight a class action lawsuit over its role in the recent listeriosis outbreak, which was described by health organisations as the largest globally.

The listeriosis outbreak hit South Africa hard, with 218 recorded deaths when the outbreak, which started in January 2017, was declared over on 3 September, 2018, by health minister Aaron Motsoaledi. The dead were mostly unborn children, infants infected before or during birth, and elderly people.

The nation panicked about the outbreak as major retailers in the country withdrew ready-to-eat processed meat products, including vienna sausages, French polony and chicken polony from shelves.

A government-led investigation found that listeriosis, a bacterial infection that is commonly transmitted by the ingestion of contaminated food products, had originated from a Tiger Brands factory in Polokwane, Limpopo. The factory, which was subsequently closed on 5 March, 2018, produced Enterprise branded ready-to-eat processed meat products.

Tiger Brands’ own independent laboratory test results confirmed the government’s findings, as the company detected the presence of Listeria strains (bacteria) in samples of ready-to-eat meat products manufactured at the Polokwane factory.

On Wednesday, Tiger Brands said it had received a summons on 16 April 2019, with respect to a listeriosis outbreak class action lawsuit.

The company intends to defend the class action and is preparing to follow due legal process,” the company said.

The summons was expected because the Johannesburg High Court gave the lawsuit the go-ahead in December 2018.

This is a key development for the lawsuit, which will likely be protracted because class actions by nature take time and are more complex than normal court processes.

The summons that Richard Spoor Inc. Attorneys issued to Tiger Brands, which is the first stage of the class action, deals with liability and not the quantum of damages.

The summons, which Business Maverick has seen, cites 14 people who were directly or indirectly affected by listeriosis and have joined the class action.

The law firm places these people into four categories:

  • The first are those who contracted listeriosis after consuming contaminated Tiger Brands products.

  • The second concerns pregnant women who consumed contaminated Tiger Brands products, which resulted in their children contracting listeriosis.

  • The third concerns people who suffered harm when people they were dependent on died from listeriosis after consuming contaminated Tiger Brands products.

  • The last concerns people who suffered harm arising from their obligation to care for people who contracted listeriosis.

They suffered damages ranging from a permanent/temporary disability, past and future medical expenses, past and future loss of income or earning capacity, psychological trauma and emotional shock, to permanent/temporary pain and suffering.

Richard Spoor Inc. Attorneys has brought the first stage of the class action on the following grounds: contravention by Tiger Brands of the Consumer Protection Act, negligence by the company and its failure to uphold the Constitution – specifically the right to life, bodily and psychological integrity.

In court papers, human rights attorney Richard Spoor said the Consumer Protection Act provides for strict liability of producers, distributors, retailers, and suppliers of goods for the harm caused in the supply of unsafe, defective or hazardous goods.

[Tiger Brands] marketed the contaminated products on the basis that they were safe and ready-to-eat without further heating or cooking,” he said.

[Tiger Brands] did not provide any instructions or warnings; alternatively, any adequate instructions or warnings, to the consumers of the contaminated products pertaining to the hazard or risk associated with the consumption of food that may be contaminated with L. monocytogenes [a bacteria] and the means by which they could guard against such hazard or risk.”

Spoor said Tiger Brands failed to take appropriate measures to eliminate their ready-to-eat processed meat products once it was aware of the listeriosis outbreak. It also failed to conduct regular testing for the presence of the bacteria at its facilities. The failure to detect contamination over a 14-month period amounts to the “most egregious wrongdoing and demonstrates a reckless disregard for the lives and safety of consumers”.

Spoor is asking the high court to award members of the class action punitive or constitutional damages.

An award of exemplary alternatively punitive, alternatively constitutional, damages would act as an effective deterrent to Tiger Brands and other large corporates who increasingly monopolise food production in South Africa and the world and would provide such corporations with the financial incentive they need to implement the often times costly measures required to guarantee consumers safety,” he said.

After all, South Africans consume Tiger Brands produced products in large volumes. A look at your kitchen cupboards and you are likely to find a plethora of Tiger Brands products, some of which are Albany, Tastic, Purity, Ko, Jungle Oats, Oros, Black Cat, and All Gold.

Tiger Brands responds

Tiger Brands has hit back, saying its lawyers informed it that South Africa’s law doesn’t “currently recognise a claim for exemplary or punitive damages, or constitutional damages of an exemplary or punitive nature”.

While Tiger Brands has product liability insurance cover, this does not include cover for exemplary or punitive damages.

The amount of such punitive or constitutional damages will be determined in the second stage of the class action.

Market watchers said Spoor would probably want a settlement that runs into billions of rand – like when he was involved in the silicosis class action against seven gold mining companies‚ which resulted in a R5-billion settlement.

Tiger Brands has been punished in other areas for the listeriosis outbreak. For its full-year 2018, it lost R1.4-billion in revenue due to the outbreak. Its share price has been a perennial loser of the JSE food producers index, falling 28% from when its Polokwane factory was closed (5 March 2018) to when the outbreak was declared to be over (3 September 2018). This decline wiped off more than R20-billion from its market capitalisation. Its share price has barely recovered, pencilling in a gain of 1.6% so far this year.

Wayne McCurrie, a senior analyst at FNB Wealth and Investments, said the market has priced in the future financial liability Tiger Brands might face from the class action.

The market knew that it [the class action] was coming. The market has put some sort of discount in Tiger Brands’ share price because it knows that there might be a big payout. Tiger Brands has admitted liability. They should settle rather than drag the matter in court for many years.” DM