Managing contractual risk by not contracting

This is a story about legal risk, and how a supplier of goods and services should manage that risk. After taking all sensible precautions, a small risk of a catastrophic event remains. And the risk is increased because of the special qualities of the purchaser, in this case their food allergies.

How should the supplier manage that risk? By (a) including a disclaimer in the contract of sale, (b) refusing to supply to that purchaser, or (c) simply taking the risk and hope it doesn’t happen (perhaps with some insurance in place to mitigate the financial consequences)?

Readers of UK newspapers may have seen, in the last few days, a story about a restaurant chain’s attitude to people with allergies. The LEON fast-food chain has about 50 outlets, most of them in London. It seems that managers of their restaurants, when faced with someone who mentions allergies, have been instructed to ask them whether their allergies are life-threatening. If the answer comes back “yes”, the manager advises them not to eat at LEON. Or to consider carefully whether they want to eat at LEON. Some customers have heard this as a refusal to serve. Or perhaps the subtlety of the official message has not been correctly communicated by the manager in all cases.

Some customers are upset about either a perceived refusal to serve, or about the advice being, in effect, a disclaimer of responsibility for ensuring that their food is not accidentally contaminated in the kitchen.

From LEON’s perspective, and as their website seeks to demonstrate, they are very careful about sourcing and checking the ingredients of their meals, they label those ingredients on their menus, and have in place procedures and staff training to avoid cross-contamination between safe and non-safe foods in the kitchen. But they do use allergens in some of their foods, e.g. peanuts are an essential ingredient if you are making satay sauce. And they are aware that mistakes can be made by fallible human beings in the heat of the kitchen, despite the best systems.

So, in light of this information, how should a restaurant behave? By relying on their systems and not raising the topic with customers, by banning customers, or by having a frank conversation with them?

Leon explains their approach as follows:

The idea that LEON could cause harm to one of our guests is horrifying. And we would therefore ask those of you with serious allergies, to consider carefully whether you choose to dine with us.

At least, that is IP Draughts’ interpretation of what Leon is saying. Their Twitter feed, which mentions this topic, is here.

Some of the customer comments that have been reported are, to IP Draughts’ mind, confusing. One, the mother of a child with multiple allergies who was allegedly turned away from a branch of LEON, is reported to have said:

No allergy sufferer expects to be catered for by every provider. Nor do we ask for 100 per cent guarantees. If with one hand they say “we can do this” but on the other “we can’t guarantee this” it negates all the good things they do.’

If with one hand you say you are not looking for the restaurant to give a 100% guarantee, but on the other you object to the restaurant saying they can’t give an absolute guarantee, what the hell are you saying?

It seems that LEON’s message to people with serious allergies is not one that they want to hear. Perhaps part of the anger being expressed on social media arises because LEON are forcing  sufferers to confront the issue at a human level, rather than letting them assume that no risk exists because they have chosen items that are marked in a particular way on a menu. Some people don’t really understand the concept of risk and probability.

If you have life-threatening food allergies, then every meal presents a risk. The risk is greater if someone else prepares the meal, and this must make social intercourse, travel, etc difficult. IP Draughts was astonished to read, a few months ago, that merely being in the same aircraft as people eating nuts could be life-threatening for some people, and as a result nuts were not served on a flight at the request of an allergic individual.

In IP Draughts’ view, a responsible board of directors of a restaurant chain should be concerned about harming its guests, for moral, legal and business management reasons. Consumer protection laws make it difficult to exclude liability in contracts with consumers. LEON has taken what appears to be a novel approach to dealing with this issue, and in doing so has put its head above the parapet for others to shoot at.

IP Draughts wonders about other food-poisoning issues that can arise in restaurants. Seafood has a higher than average risk of harming people who eat it. (Some people are allergic to it, but that is a separate issue.) Some seafood can be purged of bacteria by a process known as depuration (leaving it in running, clean water for a period of time), but it is more difficult to get rid of viruses. Where the seafood is served raw, as in the case of oysters, the risk is increased. Apparently, 100 people die each year in the United States from vibriosis, which is picked up from eating oysters.

Should restaurants have a frank conversation with people before serving them seafood? It might well put them off eating it, even if the probability of serious harm is low.

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