Due diligence

When the Food Safety Act 1990 came into force, the concept of 'due diligence' became a major talking point within the food industry. The concept was not, however, new to consumer law, having been available in the Weights and Measures Act 1963 and the Trade Descriptions Act 1968 as well as other consumer legislation. Due diligence is a protection available to potential defendants under the provisions of the Food Safety Act and the General Product Safety Regulations. It acts as a balance to the principle of strict liability which forms the basic tenet of consumer law. Strict liability means that the defendant is guilty whether or not he intended to commit the offence. Thus a food manufacturer who, for example, produces a product which by accident contains a piece of fibre from a conveyor belt will be guilty of an offence under the Food Safety Act irrespective of the fact that he was unaware that it had happened. This clearly represents an onerous burden for the manufacturer, but he can be acquitted if he is able to demonstrate that he has 'taken all reasonable precautions and exercised all due diligence to avoid the commission of the offence'. 'All reasonable precautions' means that a system of controls was in place, and 'all due diligence' means that it can be demonstrated that the system worked. The key words here are 'all' and 'reasonable'. It is necessary to show that all reasonable precautions were taken, not just some. It is also only necessary to take those precautions which are reasonable. The test of reasonableness is related to the size and nature of the business and also the risk which the precautions are designed to avoid. Risks which involve consumer safety are likely to be regarded by the Courts as carrying a higher priority than those involving possible financial loss. Legislation itself gives little clue to the detail of what is required in order to establish the defence, but the food industry can give thanks to a veritable army of used car dealers and importers of toys and novelties who, over the years, have attempted to use the defence in order to avoid conviction and have had their attempts scrutinised in minute detail by the Courts of Appeal. Some of our best known High Street retailers have also taken part in this process of shaping due diligence law. The learned judges in these cases have provided a number of decisions on individual points of issue which can be collated to provide a clearer insight into the standards to be met.

The decisions in these cases can be summarised into a series of key requirements as follows:

• The system must be under the control of the 'directing mind' of the business. Its operation can be delegated to senior managers but control must remain with the directors or owners of the business.

There needs to be practical demonstration of the control. Board meetings should include food safety issues as an agenda item. Issues should be discussed and minuted with a clear plan of action. Minutes of later meetings should demonstrate how the matter was resolved.

• The system must exist and be written down. It must be shown to work - a 'paper' system which looks impressive but fails to deliver practical results will not suffice.

There should be written procedures to control activities which can affect product safety and legality. Sufficient staff should be available to allow the system to work as intended.

• The system should be appropriate to the size of the business and the risks posed by its products.

'Off the shelf' systems will not do; the scope of the system will be dependent upon many complex factors.

• Responsibilities of staff should be clearly specified in job descriptions, and training should be given to ensure that staff are able to carry out those responsibilities effectively.

In order to show that the system works effectively, it is necessary to show that the staff have been trained both in the skills necessary to carry out their work and in the system itself.

• It must be proactive as well as reactive and should anticipate problems which are common to the business.

The system should recognise that things will not always go as planned within a business. There should be provision to deal with out-of-specification product and serious failures which will require the recall of a product.

• Records must be maintained to demonstrate that the system works as intended.

Records should relate to critical areas which can affect product safety and legality.

• The system must include the control of suppliers.

Control can be exercised through raw material specifications, supplier audits, questionnaires, certificates of compliance or analysis, or an appropriate combination of these. Reliance upon the reputation of the supplier will not suffice.

• Product testing should be a feature of the system where it is necessary to demonstrate that particular requirements have been complied with.

The level of product testing should be appropriate to the risk. The greater the level of potential risk, the greater the level and frequency of sampling.

• Complaints should be recorded and analysed in order to detect trends which should then be acted upon.

Complaints should not be regarded as a source of annoyance but as a barometer of how well the business is performing in terms of meeting both legal requirements and customer satisfaction. Problems should be carefully examined to look for their cause and a programme of improvement implemented in order to eliminate or reduce the problem.

• The system should be reviewed regularly to ensure that it remains relevant to the needs of the business.

No business is static; the laws relating to that business will change as will the nature of the business, its range of products, technology and the expectations of its customers. Systems will therefore need to be modified and updated in order to keep pace with this change.

The full requirements of the defence need to be met by food manufacturers as well as importers into the UK who will be treated as bearing the legal responsibility for the products which they import. Although the expectations of 'due diligence' are the same for imported goods as they are for goods manufactured in the UK, it is plainly not possible to discharge the responsibilities in the same way. This will require the use of auditing, holding detailed product specifications and regular testing in order to demonstrate the appropriate level of control. The greater the level of cooperation between the exporter and the importer, the easier this will be to achieve.

'Due diligence' is a principle unique to UK law. Even though its application may not be used so directly outside the UK, adoption of its principles can have advantages. For example, the principles form a sound foundation on which to organise the controls within a food business wherever it is located. If that business is supplying into the UK, adoption of the 'due diligence' principles could contribute to the UK importer's defence and make it easier to establish. Anyone familiar with quality systems will see the obvious similarities between the requirements of the 'due diligence' defence and a well-constructed quality system.

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