Class action against Nestle is shot in the dark; compromise is the best solution for all

The suit seeking damages of Rs 640 crore from Nestle for sub-standard Maggi has both positive and negative dimensions. But in the interest of fairness, it is best for the two sides and the regulator to arrive at a compromise The Union consumer affairs ministry’s decision to launch a class action suit against Nestle, makers of Maggi noodles, in the National Consumer Disputes Redressal Commission will be an important test case for such actions in the future. While tests of Maggi noodles sent outside the country to Singapore, Canada and the US appear to have passed their more stringent food safety tests, Nestle’s real battleground is India, where it is contesting the Food Safety and Standards Authority of India’s order and claims that Maggi can be hazardous to health. The class action suit, which seeks Rs 640 crore in damages from Nestle on behalf of consumers, has two dimensions – one positive, and the other negative. Since it cannot be anyone’s claim that India’s food safety standards, regulation and supervision are better than that of the US, Canada and Singapore, the class action suit seems more like an effort to push Nestle to compromise in order to spare our regulator the blushes in case Nestle gets the courts to lend it a more sympathetic ear.