Tnuva and the Silicon Affair

Israel needs tools for better enforcement and jurists with guts to make consumer protection laws stick.

October 14, 2008 20:41
3 minute read.
Tnuva and the Silicon Affair

Tnuva milk 88. (photo credit: )

A Tel Aviv District Court not only delivered a walloping blow to the dairy industry giant Tnuva last week, but also sent a warning to other companies which may have considered themselves above consumer protection laws. The justice system did not permit Tnuva to gloss over its willful addition in 1994-5 of a silicon compound to its skimmed long-life milk cartons. The chemical helps reduce frothing and thus facilitates sealing the containers. But silicon is a suspected carcinogen and forbidden in foods. Tnuva used it nevertheless to avoid having to install $300,000 worth of alternative equipment, Judge Amiram Binyamini wrote in his decision. Moreover, Tnuva "catalogued the silicon as a detergent in a clear effort to obscure an infraction of which it was aware." Thirteen years after Tnuva's dangerous practice was first exposed it was slapped with a NIS 55 million fine and required to pay an additional NIS 150,000 to the estate of Tawfiq Rabi, who launched and relentlessly pursued a class action suit. Sadly, Rabi did not live to relish his victory. Another NIS 250,000 goes to the Israel Consumers Council, which co-sponsored the litigation. The bulk of the compensation is earmarked to benefit the public by lowering prices or increasing milk content in products, financing nutritional research and distributing milk to the needy. This is the second phase of penalties for Tnuva arising from the silicon affair. Four company executives were earlier fined for deliberately misleading consumers by publishing two large, reassuring newspaper ads after the initial discovery of the dangerous additive. THERE IS more here to savor than a big food company getting its comeuppance for violating the public trust. Israeli consumers have seldom had much success in bringing class action suits meaning litigation brought by one party on behalf of a group of people all having the same grievance. At best, such efforts concluded in out-of-court settlements; often they failed completely. Not this time, however. Attorney Iyyad Rabi and his now-deceased client wouldn't back off. The most important legal innovation was the judge's rejection of Tnuva's contention that the litigants came to no personal harm and hence could not demand compensation. Binyamini determined that had Tnuva's customers realized what the product contained, they wouldn't have bought it. Hence their autonomy was impeded and the judge ruled litigants weren't obliged to prove actual illness. We trust that this decision establishes the precedent that a manufacturer is liable for misrepresentation. Were consumers required to prove a link between their consumption of a product and a subsequent medical condition, odds are powerful firms would escape the wrath of the law time and again. Binyamini's message is that willful deceit alone will cost them. CONSUMERS HAVE reason to be gratified: Any conglomerate, no matter how dominant in the marketplace, which takes consumer health lightly can be held to account. And it is laudable that the general public will benefit from the results of this class action; and that care was taken to set aside a portion of the reward to the heirs of the chief plaintiff, the man who set the legal proceedings in motion. We see this victory as a watershed which will encourage further serious class action suits. This form of litigation is sometimes held in disrepute - especially in the US, where frivolous damage claims proliferate and where juries have awarded inordinate sums for dubious claims. However, the legal circumstances of Israeli consumers are quite different. We suffer from the opposite problem: not enough class action suits. The dangers of frivolous litigation are reduced when wronged individuals join forces with responsible consumer advocate organizations in going up against mighty corporations. Consumer groups, we expect, will withhold their support from frivolous litigation while lending their moral authority and legal expertise where justified. Israel has consumer protection laws on its books. What it now needs are tools for better enforcement and jurists - like Judge Amiram Binyamini - with the guts to make the law stick.

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