Food products liability law in Canada

Food products liability law in Canada February 01, 2003 This overview of food products liability law in Canada focuses on negligence and contract law. Because Canada somewhat unusually embraces two systems of law the English common-law system in mostprovinces and the civil code system in the province of Quebec it is necessary to divide the discussioninto common law and civil law parts. In general, it will emerge that food products liability in Canada is based largely on concepts similar or identical to those found in U.S. law. The principles derived from these concepts can, however, be significantly different from those that have developed in the United States. Generally speaking, product liability is more difficult to establish in Canada, and when it is established, awards of damages tend to be smaller. Common law jurisdictions Canada s twelve common law jurisdictions include nine of its ten provinces and the three northernterritories. While there are some distinctions from province to province with respect to legislation and common law doctrine, in general the law of common law Canada on products liability matters is fairly uniform. This is partly because negligence and contract principles are subject to the authority of the Supreme Court of Canada, whose decisions are binding on all provincial courts. While American precedent is increasingly referred to in Canadian common law jurisprudence, Canadian law has historically been (and continues to be) more strongly aligned in this respect with the law of the U.K. and other Commonwealth countries. This section looks at tort and contract law principles in the common law provinces and territories. Tort law Tort law has developed differently in Canada than in the United States, largely in virtue of the English influences mentioned above. In product liability, these differences are quite considerable in principle, although (as we will see) the distinction in practice is sometimes somewhat less. The primary difference between Canada and the U.S. with respect to tort law is that Canada does not recognize the principle of strict liability, adhering instead to the negligence standard. A second difference is the strict limits on damages in Canadian negligence cases, which make more speculative claims less attractive to potential plaintiffs a situation that has been reinforced by structural differences in the Canadian legal system, namely longstanding prohibitions on contingency fees and class actions (these prohibitions have now largely been lifted), as well as the Canadian practice of making substantial awards of costs against unsuccessful parties. [1] Duty of care The Neighbour Principle Stikeman Elliott LLP www.stikeman.com

In any negligence action, several things must be proved, including causation, the existence of damages, the existence of a duty of care and the breach of a standard of care. The duty of care issue has historically been contentious in the consumer products area. Because there was no direct relationship, in most cases, between a manufacturer and the consumer of its products, recovery in negligence was traditionally impossible. There were exceptions for inherently dangerous goods, but food products obviously did not fall inside that category (recent concern over fat-laden fast food having yet to emerge). As is generally known, the House of Lords in Donoghue v. Stevenson a case involving a snail found in a bottle of ginger beer changed this. [2] In particular there was the famous formulation of the neighbourprinciple by Lord Atkin: You must take reasonable are to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour? The answer seems to be personswho are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question. [3] In Canada, this kind of liability had actually been recognized more than a decade earlier. In Buckley v. Mott [4], a 1919 decision of the Nova Scotia Supreme Court, a manufacturer of a chocolate cream candy bar featuring powdered glass as an unintended extra ingredient was successfully sued in negligence by an injured consumer on the basis of a general duty to the public not to sell such a dangerous article, even though the sale was not directly to the public. Essentially, the judge extended the dangerous article exception to include normally harmless articles that were dangerous because of faulty manufacture, rather than just those articles (such as firearms and poisons) that were of an inherently dangerous kind. An annotation to the published report of the decision remarked on the novelty of this ruling: A careful search has disclosed very few cases either in the English or American courts on the specific branch of this general question of the liability of a packer or manufacturer of food to the ultimate consumer, who purchased the same from a middleman. [5] Though the neighbour principle has been criticized for its vagueness, Donoghue v. Stevenson has remained the cornerstone of Canadian negligence law. While later case law has circumscribed the application of the principle by excluding on policy grounds certain classes of persons or types of harm that might otherwise qualify, [6] and the Supreme Court of Canada has declared that new classes of neighbours will be found only rarely, [7] users and consumers of manufactured or processed food products are well-established as a class to whom the manufacturer or processor owes a duty. Specific situations in which a duty has been found Since Donoghue v. Stevenson, Canadian law has come to recognize the existence of a duty of care in many situations in which a consumer has been injured by a food product. For example, a bakery owes a duty to a person who eats its bread [8] and a dairy company to consumers of its chocolate milk. [9] The same, incidentally, goes for food packagers, as established by a legion of exploding pop bottle lawsuits, among others. [10] It is not only consumers who lie in the contemplation of manufacturers or processors of food products, of course. A duty of care is also owed to those who handle these products, regardless of whether consumption actually takes place. For example, in Cohen v. Coca-Cola, [11] a bottler was liable for the injuries suffered by a restaurant employee when one of its bottles exploded while he was stocking a refrigerator. Causation A second element of negligence is causation, which requires a demonstration of both cause in fact andforeseeability of the injury. While we can consider this only very briefly in the present context, foreseeability issues have arisen in food products cases where the injury suffered was psychological Stikeman Elliott LLP 2

rather than physical. In Taylor v. Weston Bakeries Ltd., the psychological condition of an already depressed woman was exacerbated by her discovery of metal pieces and unsightly discolorations in a loaf of bread. [12] The bakery was found liable, on the ground that such a reaction was reasonably foreseeable. The courts drew the line, however, in Vanek v. The Great Atlantic & Pacific Co. of Canada, a case concerning a schoolgirl who had sipped from a bottle of fruit juice that contained a small amount of gasoline-like liquid. [13] While doctors insisted that the girl had suffered no harm, the parents became obsessed with the event and eventually suffered stress-related problems (in the case of the mother) and angina and coronary heart disease (in the case of the father). The Ontario Court of Appeal held that this harm was unforeseeable. Standard of care A third element of negligence is the breach of a standard of care. In this respect, Canadian products liability law differs from the strict liability model recognized in the U.S. In Phillips v. Ford Motor Co. of Canada, the distinction was expressed as follows: our courts [in Canada] do not, in product liability cases, impose upon manufacturers, distributors or repairers, as is done in some of the States of the American union, what is virtually strict liability. The standard of care exacted of them under our law is the duty to use reasonable care in the circumstances and nothing more. [14] While this is certainly an accurate description of the theoretical difference between the two systems, the practical difference is significantly smaller. Even in a negligence-based system, something approaching strict liability can be achieved if applicable standards of care are sufficiently stringent. As it happens, food products manufacturing and processing is one area in which courts have generally found a very high standard of care. In Hollis v. Dow Corning Corp., Mr. Justice La Forest of the Supreme Court of Canada observed: The courts in this country have long recognized that manufacturers of products that are ingested, consumed or otherwise placed in the body, and thereby have a great capacity to cause injury to consumers, are subject to a correspondingly high standard of care under the law of negligence. [15] It was probably no accident that early seminal cases in product liability law tended to involve food products. The words of Lord Macmillan in Donoghue v. Stevenson suggest that a high standard of care was required even then: [A] person who for gain engages in the business of manufacturing articles of food and drink intended for consumption by members of the public in the form in which he issues them is under a duty to take care in the manufacture of these articles. That duty, in my opinion, he owes to those whom he intends to consume his products. He manufactures his commodities for human consumption; he intends and contemplates that they shall be consumed. By reason of that very fact he places himself in a relationship with all the potential consumers of his commodities, and that relationship which he assumes and desires for his own ends imposes upon him a duty to take to avoid injuring them. [16] How the courts have imposed this apparently elevated standard must be understood in reference to the different heads of liability to which a manufacturer may be exposed. They are negligent manufacture, negligent design, and failure to warn. Negligent manufacture Strictly speaking, proving negligent manufacture is difficult. Plaintiffs are often unable to pinpoint exactly where in the manufacturing process the defendant breached its standard of care. However, courts have Stikeman Elliott LLP 3

tended to respond by readily inferring breach of a standard of care in a manufacturing or processing operation from the existence of a defect in a product of that operation. In Shandloff v. City Dairy Ltd. and Moscoe, the plaintiff brought a claim against the defendant dairy for injuries she sustained while drinking a bottle of its chocolate milk. While drinking the milk through a straw, she drew particles of glass into her mouth and injured herself. The Ontario Court of Appeal wrote: The utmost care was used but that care apparently was not sufficient. It does not appear by positive evidence how the broken glass found its way into this particular bottle, although the Dairy Company intended its mode of manufacture to be fool proof, and installed and designed, as far as it could, a perfect plant, but that plant evidently did not work according to plan. Someemployee did blunder. [17] The trial judge was therefore entitled to infer the dairy s negligence from the fact that the bottle contained the shards of glass. It is also instructive to note that the Court s language ( utmost care, perfect plant ) suggests that it applied a standard of care that is practically almost indistinguishable from strict liability. Defects will often be obvious and easy to prove. Soft drink bottles containing shards of glass or mice [18] and biscuits containing maggots [19] are examples. But even where a defective product no longer exists where it has been swallowed or destroyed, for example the plaintiff is not infrequently able toshow that the defect existed. Canadian courts have cited the reasoning of the Judicial Council of the Privy Council in Grant v. Australian Knitting Mills, [20] in which the plaintiff alleged that he had contracted dermatitis after purchasing and trying on woollen undergarments manufactured by the defendant. Although he had subsequently washed them, removing the sulphite that (according to his theory) had caused the inflammation, the Privy Council was willing to infer, on a balance of probabilities, that the alleged defect had in fact existed. Lord Wright stated: Mathematical, or strict logical, demonstration is generally impossible: juries are in practice told that they must act on such reasonable balance of probabilities as would suffice to determine a reasonable man to take a decision in the grave affairs of life. Pieces of evidence, each by itself insufficient, may together constitute a significant whole, and justify by their combined effect a conclusion. [21] Where negligent manufacturing is alleged, the plaintiff s burden of proving breach of a standard of care istherefore effectively discharged once he or she has proven, on a balance of probabilities, that the product did contain the defect (provided, of course, that the defendant does not present countervailing evidence to outweigh that led by the plaintiff). [22] Negligent design That a product has been produced according to the manufacturer or processor s specifications, withoutdefect, is not necessarily a guarantee against liability. A poorly designed product can produce liability as readily as a defective one. Manufacturers must therefore make reasonable efforts to reduce any risk inherent in their product designs. While this requires that the manufacturer must replace inherently dangerous designs with safer ones where these are available, [23] it does not mean that, where an existing design is acceptably safe, the manufacturer must replace it with the safest design available to it. [24] Moreover, there will be less chance of liability where an injury occurred because of an unintended use of a product, particularly where this was unforeseeable. The Alberta Court of Appeal held in Lem v. Barotto Sports, for example, that there was no breach of the standard of care required of the manufacturer of a shotgun-shell re-loading machine the design of which was not safe when the device was used in a manner that flagrantly disregarded the manufacturer s express instructions. [25] That an experienced hunter would do such a thing was unforeseeable, the Court held. Stikeman Elliott LLP 4

In food products cases, negligent design claims have often arisen where someone has been injured by a broken bottle. Here again, the standard of care is quite high. In Mayburry, Madam Justice Boyko of the Ontario Superior Court reiterated that a plaintiff must prove on a balance of probabilities (1) that the manufacturer had not used reasonable efforts to reduce risk, and (2) that other reasonable choices were available to the manufacturer that would have avoided the damage. [26] She held that a bottle containing an alcoholic beverage was of a faulty design when, having been dropped, it shattered and dispersed glass fragments up to ten feet away, injuring the plaintiff. The defendant Bacardi, who had bottled the beverage, was held liable: [It] failed to have an adequate system in place to inspect and test for fragment dispersal distance, which is a risk factor no matter what causes a bottle to break. Bacardi knew or ought to have known that such a system was reasonably necessary and would have confined fragment dispersal to a safer distance. Bacardi also failed to supply to apply polymer coating, a known safer alternative that was both affordable and available. [27] Failure to warn The ruling in Lem v. Barotto Sports, mentioned above, underscores the importance of including proper instructions and appropriate warnings with a product. As conformity with statutory food labellingrequirements [28] may still fall short of the standard of care in negligence law, food and packaging manufacturers must always consider the common law duty to warn. In Buchan v. Ortho Pharmaceutical (Canada) Ltd., the Ontario Court of Appeal held that even though the manufacturer had complied with the statutory drug-labelling requirements, it was nonetheless liable for inadequately warning of the risks associated with its products. [29] The duty of a manufacturer to warn was set out in Lambertv.Lastoplex Chemicals Co.: Where manufactured products are put on the market for ultimate purchase and use by the general public and carry danger although put to the use for which they are intended, themanufacturer, knowing of their hazardous nature, has a duty to specify the attendant dangers, which it must be taken to appreciate in a detail not known to the ordinary consumer or [user]. [30] The required level of explicitness of the warning will vary with the danger likely to be encountered in theordinary use of the product. [31] In Lastoplex, the product carried a warning against explosion, which had in fact caused the plaintiff s injuries, but the warning lacked the explicitness which the court thought thatthe particular situation demanded. [32] In Hollis v. Dow Corning, the Supreme Court reiterated that manufacturers of products that are ingested, consumed or otherwise placed in the body, and thereby have a great capacity to cause injury to consumers, are subject to a correspondingly high standard of care under the law of negligence. [33] Thus, food manufacturers have a particularly heavy onus to ensure that its products, to the extent that they create a risk to consumers during the course of ordinary consumption, are clearly labelled. Damages Compensatory damages The Supreme Court of Canada held in three 1978 decisions (the so-called trilogy) that the ultimate purpose behind an award of damages is to restore the injured party to the position in which it would have been, but for the injury. [34] This is evidently a difficult task in cases of severe or disabling injury, for which money can never compensate. Nevertheless, courts must undertake to assess a plaintiff s injury with aview to effecting compensation, to the extent possible, for the pecuniary loss sustained as a result of the defendant s negligence. [35] Stikeman Elliott LLP 5

Pecuniary losses include future care and loss of future earnings. In awarding an amount for future care, Mr. Justice Spence in Teno stated that the prime purpose of the Court is to assure that the terribly injured plaintiff should be adequately cared for during the rest of her life. [36] However, the award must be reasonable: [w]hat is being sought is compensation, not retribution. [37] The test is to award the sum that reasonably-minded people would incur, assuming sufficient means to bear such expense. [38] Calculation of loss of future earnings requires consideration of several factors, including level of earnings, length of working life, contingencies (e.g. unemployment, illness, accidents, business depression), and any duplication of the cost of future basic maintenance which may already have been accounted for under the head of future care. [39] Cap on non-pecuniary damages The most significant difference between Canada and the United States with respect to damages is the fact that large damages awards of the sort frequently awarded (at least at trial level) by U.S. juries are virtually unheard of in Canada. This is partly because civil actions are rarely tried in front of a jury in Canada, but it is mainly because the Supreme Court has set strict limits on awards in respect of non-pecuniary losses notably pain and suffering, loss of amenities, etc. [40] In the 1978 trilogy casesdiscussed above, the Court capped non-pecuniary damages at $100,000, with an allowance for inflation. [41] Mr. Justice Dickson referred explicitly to the American experience in justifying the cap: [t]his area is opento widely extravagant claims. It is in this area that awards in the United States have soared to dramatically high levels in recent years It is also the area where there is the clearest justification for moderation. [42] The same point was made by Mr. Justice Spence: The very real and serious social burden of these exorbitant awards has been illustrated graphically in the United States in cases concerning medical malpractice. We have a right to fear a situation where none but the very wealthy could own or drive automobiles because none but the very wealthy could afford to pay the enormous insurance premiums which would be required by insurers to meet such exorbitant awards. [43] The decision to set a limit was further influenced by the fact that awards for non-pecuniary losses should be fairly uniform across Canada. [44] Although, in theory, the limit may be exceeded in exceptional circumstances, [45] the limit is de facto capped at the indexed figure. Having injuries that are different, or that are more severe than those suffered by the plaintiffs in the trilogy cases, has been held not to constitute exceptional circumstances justifying exceeding the limit. [46] Punitive damages when available While the Supreme Court cap limits awards of non-pecuniary compensatory damages, non-compensatory damages are a separate issue. An award of punitive damages is the classic case of a non-compensatory award, being designed to punish the wrongdoer rather than to make up a loss suffered by the victim. In the products liability arena, the availability of punitive damages is particularly significant, because such litigation often involves a ordinary individual who has suffered personal injury at the hands of an impersonal large business with deep pockets. The principle applied in Canada is that punitive damages are to be awarded sparingly, as an exception to the rule that damages compensate the injured rather than punish the tortfeasor. The leading Supreme Court of Canada decision on the subject Vorvis v. Insurance Corporation of British Columbia statesthat such damages are to be awarded only in circumstances where the conduct giving the cause forcomplaint is of such nature that it merits punishment. [47] Stikeman Elliott LLP 6

In considering an award of punitive damages, the focus is accordingly on the conduct of the defendant. The impugned conduct cannot be conduct of which the court merely disapproves. [48] In Vorvis, Mr. Justice McIntyre further stated: Punitive damages may only be awarded in respect of conduct which is of such nature as to be deserving of punishment because of its harsh, vindictive, reprehensible and malicious nature. I do not suggest that I have exhausted the adjectives which could describe the conduct capable of characterizing a punitive award, but in any case where such award is made the conduct must be extreme in its nature and such that by any reasonable standard it is deserving of full condemnation and punishment. [49]</su DISCLAIMER: This publication is intended to convey general information about legal issues and developments as of the indicated date. It does not constitute legal advice and must not be treated or relied on as such. Please read our full disclaimer at www.stikeman.com/legal-notice. Stikeman Elliott LLP 7