Advokaten Petter Holm vid stockholmskontoret, medverkar i European Food & Feed Law Review, nr 3, 2010

Artikeln analyserar och kritiserar ett beslut från Justitiekanslern, JK, enligt vilket tillverkare av kosttillskott nekas skadestånd från staten för försäljningsförluster orsakade av en vilseledande informationskampanj som Livsmedelsverket och Läkemedelsverket bedrivit mot deras produkter.

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Official advice killed sales of colloidal silver food supplements: No state liability for misleading information

I. Background
The Swedish Chancellor of Justice ¹ in a recent decision ² denied state liability for sales losses due to misleading information announced by the Swedish National Food Administration ("NFA") and the Medical Products Agency ("MPA").

The NFA and the MPA had posted warnings on their websites concerning the dangers of food supplements containing colloidal silver, and officials had given TV interviews in the same vein. Specific brand names and companies were mentioned on the NFA homepage and there was even a link to the website of a specific company, Ion Silver. A leading professor at the MPA said on the TV news that the MPA had reported several companies to the police for selling colloidal silver products as food supplements. Those companies were however not identified by name, leaving the field open for speculation. The only company that featured in the news cast was Ion Silver. A representative of the NFA stated in the broadcast that consumption of colloidal silver has no beneficial effects on the human body. On the contrary, it could cause resistance to antibiotics as well as discoloration of the skin and internal organs. Also, the negative environmental effects of silver should be considered, the official said.

Ion Silver experienced a drastic decrease in sales of their colloidal silver product Ionosil immediately following the NFA-MPA campaign. According to Ion Silver, the NFA and the MPA had no factual basis for their statements and, in any event, the amount of colloidal silver contained in Ion Silver´s products was far too low to risk causing any of the alleged health hazards. Ion Silver filed a complaint with the Chancellor of Justice, claiming that the NFA and the MPA were liable for causing decreased sales by spreading false and misleading information concerning Ion Silver´s products.

In the course of the proceedings before the Chancellor of Justice, the NFA and MPA admitted that Ion Silver had never been subject to either criminal or administrative law enforcement and that Ion Silver´s products were in fact incapable of causing any of the health hazards mentioned in the information campaign, although some of the authorities´ statements might have been understood that way.

II. The Chancellor of Justice´s decision
The Swedish Liability Act of 1972 contains two provisions concerning state liability. Section 3:2 provides for liability for damage caused by negligence in connection with exercise of official powers. Section 3:3 prescribes liability for damage caused negligently in the course of providing information or advice, provided there is some particular cause for liability, having regard to the circumstances, in particular the kind of information or advice provided, the connection between the information or advice and the activities and expertise of the authority in question, and the circumstances in which the information or advice was provided.

The Chancellor began by considering Section 3:2 and concluded that it was not applicable, because the NFA and the MPA had not adopted any binding decision or taken any other action with direct legal effects. Therefore the information campaign had not involved an exercise of official power, which is a requisite under Section 3:2.

As for Section 3:3, the Chancellor noted that providing information on the health effects of food products and medical type products is one of the main tasks of the NFA and the MPA, and that it is ´important´ that authorities do not make statements of the kind in question without having ´good reason´. However, when scrutinizing the statements made by the NFA and the MPA, the Chancellor thought there should be a certain latitude for expressing ´differing opinions´ concerning colloidal silver supplements. Section 3.3 is applicable only if the information is objectively incorrect. This means that liability will not occur if the information is merely misleading or incomplete, even if the information could cause a reasonable recipient to draw the wrong conclusions. The Chancellor thought that there was definite reason to question the conclusions presented by the MPA and the NFA in the media. In particular, the authorities had made categorical statements concerning the health hazards of colloidal silver without mentioning that this only applied if certain concentrations were consumed. Also, they had not mentioned that products such as those of Ion Silver did not contain hazardous levels of the substance. However, while the statements made by the authorities could be misleading, the Chancellor considered them not to be objectively incorrect in the sense required for liability to arise.

III. Comments
What the Chancellor of Justice is saying, in effect, is that the state is liable for untrue information but not for information that is merely misleading in its context. This is basically in keeping with the tendencies in Swedish case law, but the decision can nevertheless be criticized.

Keeping the public informed of health risks is of course one of the most important tasks for authorities dealing with food safety and medical products. But due to their credibility and access to the media, the NFA and the MPA are able to achieve almost the same effects as a sales ban by making categorical public announcements. In this way the sales of products can be largely blocked without a proper legal basis and without taking a formal decision that can be appealed. Considering the potentially devastating effects that product safety announcements can have for individual businesses, there needs to be some form of legal control. A certain margin for error and interpretation should be allowed without risking liability, especially in cases where the authorities are required to make quick judgments. However, it is difficult to find a legitimate reason why the authorities should be allowed to spread obviously misleading information. According to the Chancellor´s argument, liability would not arise even if the authorities intentionally spread obviously misleading information. This hardly serves the public interest of receiving accurate health hazard information. In my opinion, the margin of error should in any case stop well short of allowing the authorities to make obviously misleading statements which can easily be foreseen to cause serious economic damage for businesses who are not at fault and whose products are not subject to any legal sales restrictions. This kind of unnecessary carelessness should not be met with a lack of legal accountability. The distinction between incorrect information and misleading information does not seem relevant for liability law purposes, since misleading information is just as likely to cause damage as incorrect information. The decisive question should instead be whether the authority has acted negligently when providing incorrect or misleading information. Hopefully case law will develop in this direction. It seems, though, that the Chancellor of Justice´s decision does not support this view.

<sup>1. The Chancellor of Justice (Justitiekanslern) is a public body charged with ensuring the lawfulness of the exercise of official powers. Its tasks include receiving and deciding on claims for damages against the State. Although the Chancellor is not a court, a high degree of legal authority is nevertheless attributed to its decisions. The Chancellor´s decisions can be ´appealed´ by bringing a civil action for damages in the general civil court.

2. No. 3271-08-40.</sup>



Av: Petter Holm, advokat, Gärde Wesslau Advokatbyrå, Stockholm



Publ. 2010-07-16