Legal Risks of Direct Marketing Your Product
There has never been a better time for New York farmers to sell their products directly to consumers. The number of farmers markets is growing exponentially, and public interest in local foods has never been higher. Our farmers now have more options than ever to get their products directly to consumers.
Farms transitioning into direct marketing need to consider how changes in their business plan might affect their legal exposure. Agricultural producers may be unwittingly exposing themselves to civil liability for illness or injury caused by their products.
In New York State civil lawsuits, all food producers are held “strictly liable” for the harm caused by their products. Strict liability is a legal standard of care which is best described as liability for injury without regard to fault or negligence. In a strict liability lawsuit, plaintiffs, and their tort lawyers, do not need to go through the difficulty and uncertainty of proving that a farmer has behaved negligently or carelessly in the production or processing of food. In a strict liability case, an injured party must merely prove that a product was sold in a dangerous or defective condition, and that this dangerous or defective condition was the cause of an injury. For plaintiffs, this is a simplified route to financial recovery. For our state’s direct market farmers, it is the highest duty of care the court system can impose upon them.
New York’s direct market farmers are held to this high standard of care regardless of their size or annual revenue. It may seem unfair to burden small-scale farmers with such a high standard of liability, but this legal concept has a compelling public policy goal. Its purpose is to encourage all food producers, regardless of size, to place the highest priority on food safety.
The legal risks of direct market farming, though high, are manageable. A generous insurance policy, one which covers product liability, is an essential part of a risk management strategy. Direct market farmers should make especially certain that policies cover processed food products if they are engaging in any value-added activity.
Performing all of your agricultural activities using a limited liability entity, such as aLimited Liability Company (LLC) or by incorporating, may also help to shield some of valuable personal assets from civil judgments in the event that a farm product causes someone to become ill.
Biological controls, however, are still the very best way to prevent harm or injury to consumers. The only way to avoid the potentially disastrous consequences of a strict liability lawsuit is to make a product that is absolutely safe. Maintain a zero defect mentality when growing and handling food products. Stay current with the latest good agricultural practices, and if engaged in value-added processing, rigorously adhere to a Hazard Analysis at Critical Control Points (HACCP) plan. There is no such thing as “too careful” in the food business.