Risk can emanate from the most unexpected of sources

Companies are increasingly bombarded with warnings about the risks of business interruption, reputation damage, incorrect hiring practices, employee fraud and a host of other dangers inherent in today's business world. In fact, it seems that the only certainty that business has when it comes to risk is that there will be risk and, in many instances, it will come from the most unexpected of sources.

Who would have thought that fast food and snack manufacturers could be sued for the weight that consumers of their products gain? But obesity is a global problem (some 43% of South Africans are either overweight or obese) and this may well give rise to a scourge of lawsuits.

An American organisation call the Public Health Advocacy Institute recently held a conference to "encourage and support litigation against the food industry", at which they promised to "take the battle of the bulge into the courtroom". No doubt America's "obesity lawyers" are rubbing their hands in glee at the prospect of convincing the courts that certain foods are addictive.

It almost goes without saying that over time the liability for causing obesity will be extended to other sectors. Agricultural concerns, food processors and ingredient manufacturers, restaurant franchisees, broadcasters (especially those that promote unhealthy foods to children) and advertising agencies could be held accountable.

And it is no longer in just the notoriously litigious US that these types of lawsuits are likely; there is a growing international trend towards attempting to attach liability for broad social and health concerns to private sector defendants. It seems that wherever there is a victim - regardless of the victim's own culpability - a law suit will not be far behind.

Not only has there has been an increase in this type of litigation locally but many local brands export their products to other jurisdictions and, as such, will be held accountable in those countries too.

Risk managers find themselves in the precarious position of continuously having to play devil's advocate, evaluating scenarios that until a few years ago would have been unthinkable. In future, consideration will have to be given not only to how a company's products will be used by consumers but also how they will be abused, and to what extent the company can be held liable for such abuse, even if it emanates from consumers? own poor choices. And, not only will they have to be creative about identifying the risk, they will have to look "outside the box" to finance and manage these risks. Mitigation of risk - like fast food outlets providing healthier menu options - will also become increasingly important.

For further information contact:

Herman Schoeman, MD, Guardrisk: +27 11 669-1000 / +27 82 376 3821

Prepared by:Melanie Davis, PR@Work CC, Tel: +27 11 615-3309 or +27 83 225 7450