Spoor on the hunt for Tiger settlement
‘In company’s best interest’ to settle what could be R5bn lawsuit
● Renowned human rights lawyer Richard Spoor, who is putting together a class action lawsuit against Tiger Brands for those affected by the listeriosis outbreak, says it would be in the company’s best interests to settle as soon as possible.
“If it wants to rehabilitate itself and its reputation it needs to address and resolve this issue,” he says.
The outbreak, which has killed at least 183 people and left around 1 000 ill, has been linked to the Polokwane and Germiston factories of processed-meat manufacturer Enterprise, which is a Tiger Brands subsidiary.
Spoor won multibillionrand payouts for the victims of asbestos and silicosis poisoning, but it took eight and 11 years respectively to get the responsible mining companies to settle.
He says families could be looking at three years if Tiger Brands resists an out-of-court settlement.
“We’re always pushing for a settlement,” he says. “It’s always a better option. There’s no advantage to anyone in dragging these things out.”
Gryphon Asset Management research analyst and portfolio manager Casparus Treurnicht says going for a speedy settlement might work for the company “but is also risky in the sense that they admit guilt”.
However, the costs of “dragging its feet” could be significant.
He believes the share price, which by mid-week had fallen from R475 to R350, could go as low as R270, 45% down from its high, if the company doesn’t resolve the crisis speedily.
Treurnicht says Tiger Brands could be looking at a R25-million payout for each of the parties involved in the class action.
Assuming 200 qualify, which he says is a conservative estimate, this would cost it R5billion, or 7.5% of its market capitalisation.
Spoor says around 100 clients have joined the class action so far. But close to 1 000 have been affected and “we want everybody on board”.
He says Tiger Brands “obviously won’t settle” if they’ve got a strong defence.
“But if, having looked calmly and soberly at the facts, their own people tell them, ‘You’re in trouble here,’ it’s quite likely there will be a settlement.”
Even if Tiger Brands could show that it did everything it should have in terms of health and safety regulations, his clients would still have a very strong case, he says.
“We don’t need to prove negligence. All we need to prove is that the food [from Enterprise] was contaminated and people got sick.”
He expects Tiger Brands to pull out all the stops to challenge that link.
“I think the link is unarguable. Foodstuffs which made children in Soweto seriously ill have been preserved and identified, and it’s their product.”
Even where the food product has not been preserved, he believes the evidence of epidemiologists will be decisive. If the epidemic stops now that the factories have stopped distributing their product, that would be “further proof that we’ve found the source”, he says.
“Has it ended? I think it’s likely. If that happens, case closed, I think.”
Spoor says the company’s mismanagement of the crisis influenced his decision to get involved.
“You think, ‘Oh my God, these guys really are doing themselves a lot of harm.’ And that makes you more confident that we can do this thing.
“You can understand they’re not going to accept liability. But in their enthusiasm to deny liability they really screwed up.”
He says the crisis seems to have been the result of “a monumental failure” over many months.
He says the failure of Tiger Brands to act decisively when the first signs of trouble emerged is astonishing.
“What has been going on in the last 12 months when they learnt and understood that there was this epidemic?
“Did Tiger at any stage stop to say, ‘Is this our product?’ How many corporations are there that distribute across the country, the way this epidemic must have been spread? There are a handful who could possibly be responsible for this.”
He says the only chance of success is in going the civil justice route.
In the context of food safety the level of sophistication required by investigators, prosecutors and the courts to secure a criminal conviction doesn’t exist.
“What we see is the growth of an administrative system of fines where the state gives up trying to get a criminal prosecution and imposes an administrative penalty. We see it in the context of mining all the time.”
This reflects an inability to hold executives accountable through the criminal justice system, and is why consumer and employee safety is neglected.
“We’re lagging a long, long way behind in terms of standards, compliance and accountability.”
All we need to prove is that the food was contaminated and people got sick Richard Spoor Human rights lawyer