MASTER THESIS “The Liability Regime for defe

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MASTER THESIS

“The Liability Regime for defective medical devices in the Eu under the Product Liability Directive 85/374/EC and

the Medical Devices Regulation 2017/745’’

Student: Mary Karapanagioti Student Number: 13920685 Supervisor: Candida C. Leone Master Program: European Private Law

Amsterdam, 1 July 2022

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Acknowledgements

I will always be grateful for my decision to leave my comfort zone, move into a foreign country and study at the University of Amsterdam. Apart from the knowledge that I acquired, I had the opportunity to broaden my horizons and meet people from all over the world. I became more independent and I learned to stand on my own two feet. I dare to say that studying in Amsterdam was one of the most exciting experiences in my life so far. A journey to self- awareness and self- improvement!

I would like to thank my supervisor, Candida Leone, who helped me to develop my research proposal, define my research question and enhance my thesis with her feedback. I am also thankful for her comprehension to a personal difficult situation that I experienced.

Finally, I would like to thank all who supported me from day one and encouraged me until the end of this journey. Especially, I would like to dedicate my thesis to Pinelopi Papadopoulou, who made me realize that it is my life and I should pursue my dreams.

“The secret of change is to focus all of your energy not on fighting the old, but on building the new.”

Socrates

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Abstract

The liability regime for medical devices in the European Union is regulated under the EU Product Liability Directive 85/374/EC. According to this strict liability regime without fault, the producer of a defective medical devices should be held liable for damage caused by a defect in a medical device. As far as the notified bodies are concerned, it remains to national legislator to regulate the liability regime for a wrongful act vis-à-vis the end users of medical devices.

Furthermore, the new Medical Devices Regulation 2017/745 brings new challenges for manufacturers and notified bodies who should provide financial coverage and for authorized representatives who shall be legally liable on the same basis as, and jointly and severally with, the manufacturer. The present contribution examines in detail the liability regime for defective medical devices in European Union under the Product Liability Directive and evaluates whether the Product Liability Directive remains fit for purpose in the light of new technological developments especially in the field of medical products or it calls for a revision.

Keywords: medical devices, liability, damages, defect, producer

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Table of contents

Acknowledgements ... I Abstract ... II

1. Introduction ... 1

2. The notion of medical devices... 3

3. The EU Product Liability Directive 85/374/EC- Strict liability regime ... 6

(a) Product ... 6

(b) Producer... 7

(a) The defectiveness standard ... 8

(b) The damage... 11

(c) The causality ... 12

d) Defenses... 14

4. The liability of notified bodies ... 18

5. The new Regulation on Medical Devices (EC) 2017/745 (MDR) ... 22

a) The liability of manufacturers ... 22

b) The liability of authorized representatives ... 25

c) The liability of the notified body ... 28

6. The assessment of the product liability regime in the light of new technological developments. .. 30

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1. Introduction

Medical devices provide innovative healthcare solutions for the diagnosis, prevention, monitoring, prediction, prognosis, treatment or alleviation of disease and play a pivotal role in patients’ lives1. However, a defect can be proved fatal and a patient should be able to seek compensation for damages suffered. The present thesis will analyse the product liability regime for defective medical devices in the European Union.

Firstly, the notion of medical devices will be defined under the previous and the current legal framework, meaning under the Medical Devices Directive 93/42/EEC and the Regulation on Medical Devices (EC) 2017/745.

Furthermore, the thesis will explain the strict liability regime without fault under the EU Product Liability Directive 85/374/EC for defective medical devices. In this regard, the concepts of product and producer are initially specified and following the three requirements that directive sets, the defectiveness standard, the damage and the casual link between these two, are examined in detail. Meanwhile, the research will shed light to a) the Joined Cases C-503/13 and C-504/13 (Boston Scientific Medizintechnik GmbH v. AOK Sachsen-Anhalt and Betriebskrankenkasse RWE) which gave a new interpretation of the key concepts of ‘defect’ and ‘damage’ in the Product Liability Directive and b) the Case C-621/15 (NW & Others v Sanofi Pasteur MSD) which focuses on the causal link between defect and disease. Lastly, the potential defenses that producer can invoke in order to avoid liability will be scrutinized.

Moreover, the thesis will illustrate the liability of notified bodies in the light of European Court of Justice judgement in the Pip Breast Implants Case C-219/15, given the absence of a relevant legislative provision.

Following, the research will demonstrate the impact of the Medical Devices Regulation 2017/745 on the liability regime for medical devices under the Product Liability Directive and particularly it will look into the liability regime for manufacturers, authorized representatives and notified bodies.

1 https://health.ec.europa.eu/medical-devices-sector/overview_en accessed 15 April 2022

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Finally, it is discussed whether the Product Liability Directive fits for purpose in the light of new technological developments, especially in the field of medical products or it calls for a revision.

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2. The notion of medical devices

According to Directive 93/42/EEC of 14 June 1993 concerning medical devices and Directive 90/385/EEC of 20 June 1990 on the approximation of the laws of the Member States relating to active implantable medical devices, medical device' means any instrument, apparatus, appliance, material or other article, whether used alone or in combination, together with any accessories or software for its proper functioning, intended by the manufacturer to be used for human beings in the:

- diagnosis, prevention, monitoring, treatment or alleviation of disease or injury,

- investigation, replacement or modification of the anatomy or of a physiological process, - control of conception,

and which does not achieve its principal intended action by pharmacological, chemical, immunological or metabolic means, but which may be assisted in its function by such means;2

The Regulation on Medical Devices (EC) 2017/745 which replaced Directive 93/42/EEC of 14 June 1993 concerning medical devices and Directive 90/385/EEC of 20 June 1990 on the approximation of the laws of the Member States relating to active implantable medical devices, introduced a new definition for medical devices:

‘medical device’ means any instrument, apparatus, appliance, software, implant, reagent, material or other article intended by the manufacturer to be used, alone or in combination, for human beings for one or more of the following specific medical purposes:

— diagnosis, prevention, monitoring, prediction, prognosis, treatment or alleviation of disease, — diagnosis, monitoring, treatment, alleviation of, or compensation for, an injury or disability,

— investigation, replacement or modification of the anatomy or of a physiological or pathological process or state,

2Article 2a of Directive E 93/42/EEC of 14 June 1993 concerning medical devices, Article 2a of the Directive 90/385/EEC of 20 June 1990 on the approximation of the laws of the Member States relating to active implantable medical devices.

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— providing information by means of in vitro examination of specimens derived from the human body, including organ, blood and tissue donations, and which does not achieve its principal intended action by pharmacological, immunological or metabolic means, in or on the human body, but which may be assisted in its function by such means.

The following products shall also be deemed to be medical devices:

— devices for the control or support of conception;

— products specifically intended for the cleaning, disinfection or sterilisation of devices as referred to in Article 1(4) and of those referred to in the first paragraph of this point3.

In general, the definition of medical devices within the meaning of both Directive and the Medical Devices Regulation remains the same. Nevertheless, under the new regulation, the concept of “the intended use” is more broad in order to include “prediction” and “prognosis” and more digital healthcare technologies are likely to fall under this definition of medical devices4. In order for a product to be assessed as a medical device, its intended use is of outmost importance.

The distinction of medical devices from other health product relies on the functionality of the product as determined by the manufacturer5. The product should be used for medical applications meaning in the frame of disease, injury or disability management

However, as we can figure out from the comparison of the two definitions, the Regulation on Medical Devices (EC) 2017/745 extends the scope of medical devices definition and includes also software6. A software is considered as a medical device within the meaning of the Medical Device Regulation when it is used for the acquisition, the analysis, the creation or the modification of information for medical purposes defined by the manufacturer. The introduction of software as medical devices eliminates previous ambiguities regarding whether a software is considered a medical device or not given that Medical Devices Regulation sets more clear boundaries and more cases fall under its scope. Digitalization has altered the markets. Industries such as the

3 Article 2(1) of the Medical Devices Regulation (EC) 2017/745

4 Magali Contardi, 'Changes in the Medical Device's Regulatory Framework and Its Impact on the Medical Device's Industry: From the Medical Device Directives to the Medical Device Regulations' (2019) 12 Erasmus L Rev, p. 166- 177

5 Jelena Madir, HealthTech : law and regulation, 2020, Edward Elgar Publishing Limited, p. 53-66

6 MDR Guide for Medical Device Software, version 1.0 – 16 July 2021 https://fme.nl/mdr-guide-medical-device- software

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pharmaceutical, the medical devices technology and the software technology have an intense interaction. Software technology is used more and more in order to cover health needs. The combination of medical devices and software creates new applications which should be regulated by the Medical Devices Regulation7.

7 Becker Kurt, Lipprandt Myriam, Röhrig Rainer, Neumuth Thomas, Digital health – Software as a medical device in focus of the medical device regulation (MDR) 25 October 2019, De Gruyter Oldenbourg Information technology (Munich, Germany), Vol.61 (5), p.211-218

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3. The EU Product Liability Directive 85/374/EC- Strict liability regime

The Directive 85/374/EC of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States regulates the liability regime for defective products. It aims to achieve high consumer protection and covers all kind of tangible and non- tangible goods, including medical products.

The Product Liability Directive relies on a strict liability regime (without fault) for the producers setting out three requirements: the defectiveness standard, the damage and the casual link between these two.

Particularly, article 1 of the Product Liability Directive provides that the producer shall be liable for damage caused by a defect in his product8 while according to article 4 the injured party has the burden of proof for the damage, the defect and the casual relationship between defect and damage9. The fault or the negligence of the producer are not taken into account.

Articles 2 and 3 define the content of the notions (a) “product” and (b) “producer”

respectively.

(a) Product

Article 2 provides that product means all movables even though incorporated into another moveable or into an immovable. This definition is quite broad including both all the completed goods and raw materials and components integrated into the final good. This means that generally all medical devices can be considered as products10 and fall under the scope of the directive with the exception of custom made medical devices which are not industrially produced11.

According to the European Commission, a software should also be considered as product rather than a service when it is stored on a tangible mean. Even if the software accounts for the object a service provided, it constitutes a product as it is12.

8 Article 1 of the Directive 85/374/EC

9 Article 4 of the Directive 85/374/EC

10 Peter Feldschreiber, Law and Regulation of Medicines and Medical Devices, 2021, Oxford University Press, p.

257-310

11Dr. Wolfgang Rehmann, Diana Heimhalt, Product Liability for Medicines and Medical Devices in the European Union, March 2016, TaylorWessing, https://www.taylorwessing.com/synapse/ti-eu-medical-product-liability.html, accessed 6 May 2022

12 Daily Wuyts, The Product Liability Directive – More than two Decades of Defective Products in Europe, 2014- 05-01,Journal of European tort law, , Vol.5 (1), p.1-34

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It should be noted that the third recital limits the broad definition of product and provides that “the liability without fault should apply only to movables which have been industrially produced”13. In the Veedfald case, the Advocate General Colomer, based his opinion on this recital and concluded that products such as a perfusion fluid designed for kidney transplantation and manufactured in the laboratories of a hospital, should not fall under the scope of the Product Liability Directive. The European Court of Justice did not accept this argument and stated that the Directive applies to the perfusion fluid14.

(b) Producer

Article 3 includes an extended definition of the producer. Initially, producer is deemed as the manufacturer of a finished product, the producer of any raw material or the manufacturer of a component part and any person who, by putting his name, trade mark or other distinguishing feature on the product presents himself as its producer. However, the directive takes a step further and as a producer should also be considered i)any person who, by putting his name, trade mark or other distinguishing feature on the product presents himself as its producer, ii) any person who imports into the Community a product for sale, hire, leasing or any form of distribution in the course of his business and iii), each supplier of the product shall be treated as its producer where the producer of the product cannot be identified15.

Producer is deemed the manufacturer of a finished product not only because he produces the product but also because he places it into the market and thus takes over the responsibility for potentials defects16. The definition comprises every operator participating in the complicated manufacturing process and chain including the supply and the trading of products. Remarkably, importers and suppliers fall under the Product Liability Directive17.

The aim of this wide definition is to secure that the consumer who suffers injuries due to a defective product will be able to ask for a compensation from the importer/distributor/retailer/supplier even if the producer of the defective product is located

13 Recital 3 of the Directive 85/374/EC

14 Case C 203/99, Henning Veedfald and Århus Amtskommune, Judgement of the Court, 10 May 2001

15 Article 3 of the Directive 85/374/EC

16 Norbert Reich, Product Safety and Product Liability An Analysis of the EEC Council Directive of 25 July 1985 on the Approximation of the Laws, Regulations, and Administrative Provisions of the Member States Concerning Liability for Defective Products, 1986, Journal of consumer policy, Vol.9 (2), p.133-154

17 Jelena Madir, HealthTech : law and regulation, 2020, Edward Elgar Publishing Limited, p. 53-66

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outside the European Union18. Article 3 constitutes a pro-consumer provision since it extends the notion of producer to several factors of the production process but also involves the importer of the product into the Community so as the consumer will be able to bring a claim against one factor in the European Union 19.

It should be noted that liability is joint and several where two or more producers are held liable for the same damage, without prejudice to the provisions of national law concerning the rights of contribution or recourse20.

In the following sections, the three core requirements for the establishment of the liability, meaning (a) the defectiveness of the product, (b) the damage and (c) the causality will be analysed.

(a) The defectiveness standard

According to article 6, a product is defective when it does not provide the safety which a person is entitled to expect, taking all circumstances into account, including: (a) the presentation of the product (b) the use to which it could reasonably be expected that the product would be put (c) the time when the product was put into circulation. A product shall not be considered defective for the sole reason that a better product is subsequently put into circulation.

Defectiveness is based on the “reasonable safety expectation” test. It depends on the expectations of the consumers regarding the safety of the product taking into consideration several factors: its presentation, its use and the time when it was put into circulation21. According to the sixth recital in the preamble to that directive, that assessment must be carried out having regard to the reasonable expectations of the public at large.

18 Dr. Wolfgang Rehmann, Diana Heimhalt, Product Liability for Medicines and Medical Devices in the European Union, March 2016, TaylorWessing, https://www.taylorwessing.com/synapse/ti-eu-medical-product-liability.html, accessed 6 May 2022

19 Giorgio Risso, Product liability and protection of EU consumers: is it time for a serious reassessment? 2019, Journal of Private International Law, 15:1, p. 210-233

20 Rod Freeman, Claire Temple, Tracey Bischofberger, Sarah-Jane Dobson and Carol Roberts, Cooley LLP, Product liability and safety in the EU: overview, 1 August 2020, Thomson Reuters Practical Law,

https://uk.practicallaw.thomsonreuters.com/w-013-

0379?transitionType=Default&contextData=(sc.Default)&firstPage=true , accessed 6 May 2022

21 Dr. Wolfgang Rehmann, Diana Heimhalt, Product Liability for Medicines and Medical Devices in the European Union, March 2016, TaylorWessing, https://www.taylorwessing.com/synapse/ti-eu-medical-product-liability.html, accessed 6 May 2022

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The defectiveness of a product is measured against an objective standard and it is irrelevant if an individual claimant deemed the product to be defective22. The criterion for the establishment of defectiveness is considered objective because it focuses on the public’s legitimate expectations and not to the subjective expectations of the individual suffering damages. Moreover, the criterion is deemed normative because it is related to legitimate expectations and not actual ones. Thus, it rests at the courts to determine the level of safety that the public can expect, independently of the public actual expectations23. This has particularly application to medical products where there is a certain “artificiality” in specifying what people are entitled to expect24. In the known A v National Blood Authority case, the Court stated it was reasonable for a patient to have a legitimate expectation that the transfused blood was absolutely safe regardless the actual expectations of the public that the transfused blood may be contaminated with viruses25.

Furthermore, the defectiveness of a medical device can be found in three types. Firstly, a medical device can be defectively designed. In this case the medical device is manufactured in the appropriate way but it presents an unreasonably dangerous design that can cause damages to patients. The medical device can be in the market without provoking injuries for a long period but over time it can break down. Moreover, a medical device can be defectively manufactured. This means that the medical device is improperly manufactured or otherwise damaged before reaching the patient, through a manufacturing error, a shipping problem, or damage that occurs at the hospital or doctor's office. The defect can arise during the whole procedure which begins with the production stage until the circulation of the product when it becomes available to the consumer.

Finally, as mentioned above, a medical device can be defectively marketed meaning that it lacks recommendation, warning or instruction related to its use. The producer fails to provide adequate or accurate warnings regarding the danger posed by the medical device or its safe and appropriate use26.

22 Peter Feldschreiber, Law and Regulation of Medicines and Medical Devices, 2021, Oxford University Press, p.

257-310

23 Daily Wuyts, The Product Liability Directive – More than two Decades of Defective Products in Europe, 2014- 05-01, Journal of European tort law, Vol.5 (1), p.1-34

24 Andrew Grubb, Judith Laing and Jean McHale, Principles of Medical Law, 2010, Oxford University Press, 3rd Edition, par. 18.60

25 A & Ors v National Blood Authority [2001]

26 David Goguen, Product Liability Claims Involving Medical Devices, Nolo, https://www.nolo.com/legal- encyclopedia/product-liability-claims-medical-devices-29684.html accessed 6 May 2022

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Regarding medical devices, the most important aspect is the way the product is presented.

Medical devices should be presented to the consumer with adequate warnings and information about its inherent dangers27. The lack or the inadequacy of warnings regarding the use of the product can establish the defectiveness of the product as it is clear by several decisions on pharmaceutical and medical products (Cass (Fr) 22 November 2007, RDC 2008, Jay and Lund v Roche (2004) BS 678/1999)28. The new Regulation on Medical Devices (EC) 2017/745 sets further obligations to producers to provide adequate warnings and accurate information in order to avoid misinformation and misunderstanding and thus liability under the Product Liability Directive29.

Despite the fact that the Product Liability Directive is based on a strict non-fault based regime, it has been controversially discussed that the definition of defect entails a negligence standard30. This opinion is based on the ground that certain defects of design or the inadequacy of warnings require a balance of risks and benefits raised in the supply of several products31. Especially, as warning defects are concerned, it is supported that failure to provide adequate warnings regarding the side effects of a medical product is related to the reasonable feasibility of warning given the stage of technological development in obtaining information32.

In joint cases C-503/13 and C-504/13, the European Court of Justice (“ECJ”) provided a preliminary ruling on the liability for damages caused by defective medical devices and has given a highly debated broad definition of the notion of a “defective product” under the Directive regarding implantable medical devices. Particularly, the Court stated that if products that either belong the same group or form part of the same production series present a potential defect, then such a product should of the same group or series be considered defective too and there is no need to establish the defectiveness of that product33.

27 Anne Ware, Grant Castle, Product Liability for Medical Devices, July/August 2005, The Regulatory Affairs Journal –Devices, p. 217-224

28 Daily Wuyts, The Product Liability Directive – More than two Decades of Defective Products in Europe, 2014- 05-01, Journal of European tort law, Vol.5 (1), p.1-34

29 Annex I, Chapter I, paragraph 4 of the Medical Devices Regulation 2017/745

30Richard Goldberg, Medicinal Product Liability and Regulation,2013, Hart Publishing p. 19-20

31 Christofer John Miller, Richard Goldberg, Product Liability, 2004, Oxford University Press, 2nd ed, par. 10.13- 10.19

32 Jane Stapleton, 'Liability for Drugs in the U.S. and EU: Rhetoric and Reality', 2007, The Review of Litigation, vol. 26, p. 1019

33 Joined Cases C-503/13 and C-504/13, Boston Scientific Medizintechnik GmbH v AOK Sachsen-Anhalt — Die Gesundheitskasse (C-503/13), Betriebskrankenkasse RWE (C-504/13), Judgement of the Court, 5 March 2005, paragraph 43

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The Court came up to this conclusion taking into account the high safety requirements that patients expect to enjoy given their vulnerability. It agreed with the Advocate General that when it comes to potentially defective products that either belong to the same group or form part of the same production series, all the products of the same group or series should be considered as defective without any need to prove the defectiveness of those products. This interpretation is compatible with the aims of the EU legislature, meaning to balance the risks of the technological development between the producers and the injured patients.

“Accordingly, where it is found that such products belonging to the same group or forming part of the same production series have a potential defect, it is possible to classify as defective all the products in that group or series, without there being any need to show that the product in question is defective. Moreover, such an interpretation is consistent with the objectives pursued by the EU legislature, seeking to ensure, in particular, as is apparent from the second and seventh recitals in the preamble to Directive 85/374, a fair apportionment of the risks inherent in modern technological production between the injured person and the producer34”.

(b) The damage

According to article 9, “damage” means: (a) damage caused by death or by personal injuries; (b) damage to, or destruction of, any item of property other than the defective product itself, with a lower threshold of 500 ECU, provided that the item of property: (i) is of a type ordinarily intended for private use or consumption, and (ii) was used by the injured person mainly for his own private use or consumption. This Article shall be without prejudice to national provisions relating to non-material damage.

Damages caused by death or by personal injuries and damages or destruction of property fall with the scope of the Directive. Damage to property does not comprise damage or destruction of the defective product itself. There is a threshold of 500 ECU35. Under the above article of the Directive, compensation for damaged property is based on objective criteria when limited to items (other than the defective product itself) of a type ordinarily intended for private use or consumption and on subjective criteria when restricted to items used by the injured person mainly for his own

34 Ibid, paragraph 36-42

35 Geraint Howells, Christian Twigg-Flesner, Thomas Wilhelmsson, Product liability and safety in Rethinking EU Consumer Law, 2018, Routledge p.258-289

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private use or consumption36. Nevertheless, according to article 16 of the directive, Member States have the possibility to set a limit for the total liability of a producer in the case of death or personal injury caused by identical items with the same defect37.

In joint cases C-503/13 and C-504/13, the European Court of Justice also gave a broad interpretation of the concept of “damage”38. The Court stated that compensation for damages entails all needed to erase detrimental consequences and to bring back the level of safety that a patient expects. Finally, it concluded that especially for medical devices, the patient should be compensated for the costs bared to replace the defective product.39

This decision is likely to bring an extension of liability for manufacturers of medical devices since potentially defective products can be considered as defective within the meaning of the Product Liability Directive. The most significant aspect of this decision is that the patient will not be obliged to show the individual defectiveness of the product. It suffices that the product in question belongs to the same product group or forms part of the same production series with products presenting a potential defect.

(c) The causality

As mentioned above, according to article 4, the consumer should prove that he/she suffers damages due to the defective product and that there is a causal link (but-for) between the defect and the injury. The Directive does not include a definition of causality and it remains to national courts to apply their national rules regarding the concept of causation.

It should be mentioned that not every defect of the product is eligible to give rise to compensation. The consumer should prove that the identified defect caused the specific harm. This means that the defectiveness standard and the causality are intertwined. Moreover, every proof of

36 Daily Wuyts, The Product Liability Directive – More than two Decades of Defective Products in Europe, 2014- 05-01, Journal of European tort law, Vol.5 (1), p.1-34

37 Dr. Wolfgang Rehmann, Diana Heimhalt, Product Liability for Medicines and Medical Devices in the European Union, March 2016, TaylorWessing, https://www.taylorwessing.com/synapse/ti-eu-medical-product-liability.html, accessed 6 May 2022

38 Joined Cases C-503/13 and C-504/13, Boston Scientific Medizintechnik GmbH v AOK Sachsen-Anhalt — Die Gesundheitskasse (C-503/13), Betriebskrankenkasse RWE (C-504/13), Judgement of the Court, 5 March 2005,

39 Ibid, paragraph 49, 50

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but-for causation presupposes the proof that the individual product that purportedly caused the plaintiff’s harm was also affected by the product’s in abstracto defect40.

Causality is the biggest obstacle for claimants seeking compensation for medical devices or pharmaceutical products. Especially, in cases where the manufacturer failed to provide the consumer with adequate warnings and information, the consumer should prove that i) there was a lack of recommendation, warning or instruction related to the product use and ii) the product provoked the particular damage to the individual (individual causality)41.

In June 2017 the Court of Justice of the European Union delivered a complex decision in Case C621/15, N.W, L.W & C.W v Sanofi Pasteur MSD SNC regarding the liability of vaccine producers. The Court clarified aspects of the casual link that a claimant needs to establish in order to ask for compensation and hold the producer liable under the Product Liability Directive42.

The Court pointed out that Directive 85/374 does not contain any definition of the concept of ‘causal relationship’ within the meaning of Articles 1 and 4 thereof 43 and that Article 4 of Directive 85/374 provides that the victim has the burden of proof, neither Article 4 nor any other provision of that directive addresses the other aspects relating to how that proof is to be made out 44. In contrast, as the Court mentioned, it is up to the national courts to assess the probative value of the evidences based on the principles of equivalency and effectiveness 45.

The Court concluded that national courts are entitled to take into account factual, serious, specific and consistent evidence that the applicant brings before it and that enables it to establish the defectiveness standard and the casual link between the defect and the disease, even if medical research does not establish and rules this link. However, in any case, national courts should respect

40 Thomas Verheyen, Modern Theories of Product Warnings and European Product Liability Law, 2019, Utrecht Law Review, 15(3), pp.44–56

41 Anne Ware, Grant Castle, Product Liability for Medical Devices, July/August 2005, The Regulatory Affairs Journal –Devices, p. 217-224

42 Elisabet Ruiz Caro, The Lack of Medical Research Does Not Prevent an Injured Person from Proving the Defect of a Product and the Causal Link between the Defect and the Damage, 2017, European journal of risk regulation, Vol.8 (4), p.798-803

43 Case C621/15, N.W, L.W & C.W v Sanofi Pasteur MSD SNC, Judgement of the Court, 21 June 2017, paragraph 22

44 Ibid, paragraph 24

45 Ibid, paragraph 25

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the rules set by the Directive regarding the burden of proof and protect the effectiveness of the system of liability46.

Finally, the Court concluded that article 4 should be interpreted as precluding evidentiary rules which on the basis of predetermined factual evidence always accept the causality between the defect of the vaccine and the damage while medical research does not establish and rules this link

Article 4 of Directive 85/374 must be interpreted as precluding evidentiary rules based on presumptions according to which, where medical research neither establishes nor rules out the existence of a link between the administering of the vaccine and the occurrence of the victim’s disease, the existence of a causal link between the defect attributed to the vaccine and the damage suffered by the victim will always be considered to be established when certain predetermined causation-related factual evidence is presented47. This decision of the European Court of Justice cannot be considered as a revolutionary one regarding the interpretation of the article 4 of the Directive and especially regarding the burden of proof and the casual link between the defect and the damage. In contrast, the significance of this judgement is focused on the way that national courts should examine and assess the causality between damage and vaccination and the defectiveness standard of a medical product. If national courts figure out that a disease can be attributed reliably to the administration of a vaccine and if a level of reasonably expected protection is not provided by a vaccine, then the manufacturer should face liability for damages 48.

After analyzing the three core requirements for the establishment of the liability, we should analyze the defenses that a producer can have under the Product Liability Directive.

d) Defenses

Article 7 lists the defenses that a producer may raise in order to avoid liability under the Product Liability. Recital 7 of the Directive provides that with the aim of a fair balance of risks

46 Ibid, paragraph 43

47 Ibid, paragraph 45

48 Agata Wnukiewicz-Kozłowska, Urszula Dorota Drozdowska, Causal Effect Relationship in Medical Cases. An Old Problem in a New Scenario. Commentary to CJEU Judgment (Second Chamber) of 21 June 2017, N.W. &

Others V. Sanofi Pasteur MSD & Others, Case C-621/15, EU:C:2017:484, 21 August 2021, Approbative Gloss, Review of European and Comparative Law, Vol.46 (3), p.263-290

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between the injured person and the producer, the producer has the possibility to be released from liability under certain circumstances49. Particularly, the producer shall not be held liable if he proves:

(a) that he did not place the product on the market; or

(b) that, regarding the circumstances, it is possible that the defect provoked the damage did not exist at the time when the product was placed on the market by the producer or that this defect occurred afterwards; or

(c) that the producer did neither manufactured nor distributed the product for commercial and economic reasons in the context of his business activities or

(d) that the defect occurs because the product complies with mandatory public legislation; or (e) that the state of scientific and technical knowledge at the time when the producer placed the product on the market did not enable the discovery of the defect; or

(f) when it comes to a manufacturer of a component, that the defect is due to the design of the product in which the component has been integrated or to the instructions that the manufacturer gave50.

The producer has the burden of proof for these defenses. Regarding medical products and medical devices, a significant defense is provided to producers who are likely to face product liability claims in the European Union51. This is the so called ‘development risks defense’

regulated in article 7(e) of the Directive. This defense is based on the state of scientific and technical knowledge at the time when the product was put into circulation and the impossible

49 Recital 7 provides “whereas a fair apportionment of risk between the injured person and the producer implies that the producer should be able to free himself from liability if he furnishes proof as to the existence of certain exonerating circumstances;”

50 Article 7 states that a producer shall not be liable if he proves: (a) that he did not put the product into circulation;

(b) that, having regard to the circumstances, it is probable that the defect which caused the damage did not exist at the time when the product was put into circulation by him or that this defect came into being afterwards; (c) that the product was neither manufactured by him for sale or any form of distribution for economic purpose nor manufactured or distributed by him in the course of his business; (d) that the defect is due to compliance of the product with mandatory regulations issued by the public authorities; (e) that the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of the defect to be discovered;

(f) in the case of a manufacturer of a component, that the defect is attributable to the design of the product in which the component has been fitted or to the instructions given by the manufacturer of the product

51 Marion Palmer, Caroline Moore, European Union: The Development Risks Defence: How Future-Proof Is It?

2019, Hogan Lovells, p.10-11

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detection of the defect. The introduction of article 7 (e) was “one of the most controversial aspects of the debate on product liability52.” Supporters of this article claimed that this defense gives a motivation for technological development and innovation while the opponents highlighted that the development risk defense goes against to the strict nature of the liability regime under the Directive53. As a compromised solution, article 15 par. 1b gives to Member States the option to derogate from Article 7(e)54.

The case 7e was introduced in order to favor innovative industry. Particularly, the aim of this article is to protect innovation for products that were produced under emergent situations.

However, it does not apply in cases where the products have discoverable effects. The producer will not be held liable for design defects due to lack of risk knowledge55. He should prove that he was not able to identify the defect at the time the product was put into circulation.

Article 7 (e) does not clarify the kind of defect that should be undiscoverable. Alike with article 6, article 7(e) should be interpreted as including all type of defects; both manufacturing and marketing. Moreover, the risk development defense implies that the state of scientific and technical knowledge at the time when the producer placed the product on the market did not enable the discovery of the defect56.The concept of “state of scientific and technical knowledge” is quite vague.

In the case C-300/95 Commission of the European Communities v United Kingdom of Great Britain and Northern Ireland, the European Court of Justice clarified that “the clause providing for the defence in question does not contemplate the state of knowledge of which the producer in question actually or subjectively was or could have been apprised, but the objective state of scientific and technical knowledge of which the producer is presumed to have been informed.However, it is implicit in the wording of the Article 7(e) that the relevant scientific and

52 Green Paper Liability for defective products, COM(1999) 396 final, 23.

Richard Goldberg, Medicinal Product Liability and Regulation, 2013, Hart Publishing, p 168.

53 Daily Wuyts, The Product Liability Directive – More than two Decades of Defective Products in Europe, 2014- 05-01, Journal of European tort law,Vol.5 (1), p.1-34

54 Bernhard A. Koch, The development risk defence of the EC Product Liability Directive, 2018, Pharmaceuticals Policy and Law 20, p. 163–176

55 Duncan Fairgrieve, Peter Feldschreiber, Geraint Howells, Marcus Pilgerstorfer Qc, Products in a Pandemic:

Liability for Medical Products and the Fight against COVID-19, 2020, European Journal of Risk Regulation, 11, pp.

565–603

56 Bernhard A. Koch, The development risk defence of the EC Product Liability Directive, 2018, Pharmaceuticals Policy and Law 20, p. 163–176

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technical knowledge must have been accessible at the time when the product in question was put into circulation.57

This judgment sets an objective standard. It focuses on the objective state of scientific and technical knowledge of which the producer is supposed to have been informed while it is irrelevant if the producer had individually access to a state of knowledge. This state of knowledge should be assessed taking into account if the knowledge was accessible at “the time when the product was put into circulation”58.

57 C-300/95 Commission of the European Communities v United Kingdom of Great Britain and Northern Ireland, Judgement of the Court, 29 May 1997, paragraph 27-28

58 Richard Goldberg, Julian Lonbay, Pharmaceutical Medicine, Biotechnology and European Law, 2000, Cambridge University Press, p 190

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4. The liability of notified bodies

A notified body is a private organization designated by an EU country to assess the conformity of certain products before being placed on the market. These bodies carry out tasks related to conformity assessment procedures set out in the applicable legislation, when a third party is required. The European Commission publishes a list of such notified bodies59.

Regarding medical devices, manufacturers have to obtain a CE marking for their products in order to put them into circulation. Directive 93/42/EEC, replaced now by the Medical Devices Regulation 745/2017, set the obligations of the notified bodies regarding the conformity assessment in the Annex II: they should inspect the quality system of the manufacturer, examine the design of the product and surveil that the manufacturer duly fulfils the obligations imposed by the approved quality system60. However, it did not mention anything concerning the liability of notified bodies in case that they did not assess properly the conformity of a medical device. Should the consumer hold liable a notified body for violation of its obligation? The answer to this question was given by the European Court of Justice in the know PIP Breast Implants case (C 219/15)61 which analysed the potential liability of notified bodies.

In this case, a woman namedElisabeth Schmitt had fitted breast implants produced by a French manufacturer, PIP. However, it was proven that the producer in violation of quality standards used industrial silicone for some breast implants in order to save production costs. The products were withdrawn from the market and the company was declared bankrupt. Thus, the woman was no longer able to bring directly an action against the manufacturer. As a result, she claimed against TUV Rheinland LGA Products, the notified body which had assessed the quality of the products. Schmitt argued that the notified body did not fulfill its obligations properly and it should have inspected the delivery notes the invoices in order figure out the irregular silicone that the manufacturer used. The German Court asked three preliminary questions to the European Court

59 https://ec.europa.eu/growth/single-market/goods/building-blocks/notified-bodies_en

60 Council Directive 93/42/EEC of 14 June 1993 concerning medical devices, Annex II, articles 2,3,4

61 Case C-219/15 Elisabeth Schmitt v TÜV Rheinland LGA Products GmbH, Judgement of the Court, 16 February 2017

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of Justice on the interpretation of the Directive 93/42/EEC and especially on its purpose and intention62.

The Court stated that the provisions of Annex II to Directive 93/42 do not impose a general obligation on the notified body to carry out unannounced inspections, to examine devices and/or to examine the manufacturer’s business records63. However, as the Court mentioned, the notified bodies have the possibility to visit the manufacturer without previous notice, undertake testing of the quality system and ask for data in order to verify manufacturer’s conformity64.

Furthermore, the Court recognized an appropriate degree of discretion that the notified body should enjoy and concluded that notified bodies undertake a general obligation to act with all due diligence when they fulfill their tasks concerning the conformity assessment65. Consequently, the Court mentioned that in case of indications that a medical device is not in compliance with the Directive, a notified body has the obligation to alert and take decisive measures66.

Moreover, the Court answering the first question of the court of reference, the former said that the Directive aims to protect health stricto sensu and provide safety to users of medical devices but also to third parties or other persons. Following, the actual aim of the Directive is the protection of end users of medical devices while generally the involvement of the notified bodies in the procedures of conformity declaration is meant to the protect the health and safety of persons67.

Following, the Court examined if a notified body should be held liable vis-à-vis the end users of medical devices in case that the former violates its obligations regarding the conformity assessment procedure. The Court came up to the conclusion that it is not the goal of the Directive to regulate the liability regime of notified bodies vis-à-vis end users of medical devices. The requirement for the notified bodies to take out civil liability insurance under Section 6 of Annex

62 Wouter den Hollander, Supervisory liability for defective breast implants up to national law, ECJ rules, 5 May 2017 http://www.stibbeblog.nl/all-blog-posts/commercial-litigation/supervisory-liability-for-defective-breast- implants-up-to-national-law-ecj-rules/ accessed 8 May 2022

Verbruggen, Paul; Van Leeuwen, Barend, The liability of notified bodies under the EU’s new approach: The implications of the PIP breast implants case, 2018, European Law Review, 43(3), p. 394-409.

63 Case C-219/15 Elisabeth Schmitt v TÜV Rheinland LGA Products GmbH, Judgement of the Court, 16 February 2017, paragraph 40

64 Ibid paragraph 42-43

65 Ibid paragraph 45-46

66 Ibid, paragraph 47.

67 Ibid, paragraph 50, 53

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XI of the Directive does not entail that end users of medical devices are entitled to ask for compensation for damages they suffered from notified bodies since there is no specific relevant provision in Directive 93/4268.

As a result, the Court stated that under the principles of equivalence and effectiveness, it remains to national legislator to regulate the liability regime of notified bodies for a wrongful act vis-à-vis the end users of medical devices69.

From this judgement, it is obvious that the European Court of Justice does not deem that Directive 93/42/EEC gave the right to the end users to bring a direct action against notified bodies.

In contrast, the Court did not examine if the limited scope of the Product Liability Directive, which as analysed in the previous chapter regulates only the liability regime for the producer of defective products, should be extended in order to protect end users of medical devices in case that a notified body did not fulfill its conformity assessment obligations70.

Moreover, even if the judgement recognizes an obligation for the notified bodies “to act with all due diligence”, it does not specify to whom the notified bodies should fulfill this obligation. Also, it does not clarify the consequences of the violation of such an obligation: is it a judicial protection granted? Similarly, the decision concluded that the aim of the Directive is to ensure the safety and the health of persons but it does not explain the consequences that follow from this purpose. Finally, the Court stated that it remains to Member States to define the liability of notified bodies. However, given that European Law does not preclude a specific relative regime, it is neither provided for, nor required71.

In any case, PIP Breast Implants case could be considered as an attempt to smooth the transition process from the Directive 93/42/EEC to the new Regulation: the Regulation incorporates expressly all the obligations that notified bodies had according to Schmitt claims.

Similarly, the Court determined the obligations of notified bodies until the application of the Regulation. However, given that the new Regulation does not include rules on the private law

68 Ibid paragraph 56-57

69 Ibid paragraph 59

70 Verbruggen, Paul; Van Leeuwen, Barend, The liability of notified bodies under the EU’s new approach: The implications of the PIP breast implants case, 2018, European Law Review, 43(3), 394-409.

71 Anna Wallerman, Pie in the sky when you die? Civil liability of notified bodies under the Medical Devices Directive: Schmitt, 2018-02-01, Common market law review, Vol.55 (1), p.265-278

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liability of notified bodies the general obligation imposed on notified bodies in the above case under the Directive 93/42/EEC to act with all due diligence when engaged in a procedure relating to the EC declaration of conformity is most likely continue to apply under the new Regulation as well72.

72 Verbruggen, Paul; Van Leeuwen, Barend, The liability of notified bodies under the EU’s new approach: The implications of the PIP breast implants case, 2018, European Law Review, 43(3), 394-409

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5. The new Regulation on Medical Devices (EC) 2017/745 (MDR)

The Regulation on Medical Devices (EC) 2017/745 replaced the Directive E 93/42/EEC of 14 June 1993 concerning medical devices and the Directive 90/385/EEC of 20 June 1990 on the approximation of the laws of the Member States relating to active implantable medical devices.

The Medical Devices Regulation came into force in May 2017 and it became fully applicable in 26 May 2021. In combination with the In Vitro Diagnostic Medical Devices Regulation (EU) 2017/746 (IVDR), the Medical Devices Regulation makes EU legislation compatible with technical development, innovation in medical science and advancement in law- making. The new Regulations will create a robust, transparent, and sustainable regulatory framework, recognized internationally, that improves clinical safety and creates fair market access for manufacturers and healthcare professionals73.

As main principles of the current legislative framework we can recognize firstly the free movement of goods and secondly, the consumer protection and safety with the use of safe and compliant products74. Particularly, the new regulation aims to boost the good function of the internal market in the European Union by considering medical devices as goods and to promote public health by setting high standards of quality for medical devices75.

Apart from the regulatory changes that the Medical Devices Regulation provokes, it also includes provisions that are meant to influence the medical device liability regime under the Product Liability Directive. Below I highlight the liability of manufacturers, the liability of authorized representatives and the liability of the notified body as regulated in the Medical Devices Regulation.

a) The liability of manufacturers

Article 10 of the Medical Devices Regulation analyses the general obligations of manufacturers. These obligations are crucial for the manufacturers in order to minimize the liability risks.

73 https://ec.europa.eu/health/medical-devices-new-regulations/getting-ready-new-regulations_en, accessed 10 April 2022

74 Sarah- Jane Dobson, The Legislation and Regulation of Medical Devices. In: The Law and Regulation of Medicines and Medical Devices, 2021, Oxford University Press, p 176-187

75 David Orentlicher, Tamara K. Hervey, The Oxford Handbook of Comparative Health Law, 2022 Oxford University Press, p 779-804

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Briefly, the manufacturers should ensure that the medical devices have been designed and manufactured in accordance with the requirements of the Medical Devices Regulation. They also should provide a Risk Management system in compliance with Annex I Section 3 of the Medical Devices Regulation and conduct a clinical evaluation for their devices. In addition, they should draw up and keep up to date technical documentation and they shall draw up an EU declaration of conformity in accordance with Article 19 and affix the CE marking of conformity in accordance with Article 20. Moreover, manufacturers shall comply with the obligations relating to the Unique Device Identification (UDI) system and maintain a quality management system. Furthermore, manufacturers shall ensure that the device is accompanied by the information set out in Section 23 of Annex I and take the necessary corrective action to bring a device into conformity, to withdraw it or to recall it, as appropriate in case that a device is not in conformity with this Regulation.

Finally, manufacturers shall have a system for recording and reporting of incidents and field safety corrective action and provide competent authorities with all the information and documentation necessary to demonstrate the conformity of the device.76

Regarding the liability regime of manufacturers, article 10 par 16 introduces a new obligation for financial coverage. There was no such regulation in the Medical Device Directive.

Particularly, this provision gives the right to natural or legal persons to ask for compensation for damages suffered due to a defective device under European and national legislation and indicates that manufactures should provide sufficient financial coverage in the light of their product liability under the Product Liability Directive. As recital 31 of the Medical Devices Regulation also clarifies, such measures should be proportionate to the risk class, type of device and the size of the enterprise77. This requirement does not preclude more protective measures under national legal framework78.

Article 10 par 16 does not change substantively the liability regime for manufacturers in case of defective medical devices. In contrast, this article relies on the Directive 85/375/ECC and repeats that natural or legal persons have the right to ask for compensation in case that they suffer damages caused by defective products. The new aspect that this regulation brings is the sufficient

76 Article 10 of the Regulation on Medical Devices (EC) 2017/745 (MDR)

77 Council of the European Union, Interinstitutional File 2012/0266 (COD), Reference 12401/15 ADD 4 (28 September 2015), at 31

78 Jelena Madir, HealthTech : law and regulation, 2020, Edward Elgar Publishing Limited, p 126-135

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financial coverage that manufacturers should provide in respect of their potential liability under Directive 85/374/EEC. The Medical Devices Regulation does not introduce an obligatory insurance for the potential targets of lawsuits, but it introduces an obligation for manufacturers to form sufficient provisions or having evidence of a liability insurance policy79.

Moreover, regarding the obligation of manufacturers to insure their products, the Advocate-General Bobek in Case C-581/18 RB v TÜV Rheinland LGA Products GmbH, Allianz IARD SA stated that article 10 par 6 does not impose an insurance obligation to manufactures recognizing that there are other means of sufficient financial coverage. As he mentioned, the article 10 refers to national law and does not favor one harmonized solution such as mandatory insurance.

“Although Article 10(16) could perhaps be interpreted, at a stretch, as potentially also including insurance against civil liability, there are other means of making sure that the manufacturer has available ‘sufficient financial coverage in respect of their potential liability’ than an insurance obligation. Moreover, the reference in Article 10(16) to national law makes clear that the EU legislature did not intend to provide for one harmonised solution in that regard, such as compulsory insurance against civil liability to be taken out by all manufacturers of medical devices80.”

However, the Medical Devices Regulation does not determine what the notion of

“sufficient” financial coverage means. When a financial coverage is considered sufficient or insufficient? How a manufacturer should know if he fulfils the required level of insurance?

Actually, there is no uniform answer to this question. It remains to manufacturers to assess the potential damages that a defective device may cause, through clinical evaluation, risk management and post-market surveillance and estimate the level of financial coverage necessary to cover these risks81.

It should be noted that there a distinction between the notion of producer as defined under the Product Liability Directive and the notion of manufacturer and other economic operators as

79 https://regulatoryandmore.com/2020/08/18/art-10-general-obligations-of-manufacturers-under-mdr-and-ivdr- financial-coverage/ accessed 10 April 2022

80Case C-581/18 RB v TÜV Rheinland LGA Products GmbH, Allianz IARD SA,Opinion of Advocate General Bobek, delivered on 6 February 2020, paragraph 57

81 Jerome Randall, Sufficient financial coverage (MDR Art.10(16)/IVDR Art.10(15)), 2021, LinkedIn

https://www.linkedin.com/pulse/sufficient-financial-coverage-mdr-art1016ivdr-art-jerome-randall-phd/ accessed 12 April 2022

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defined under Medical Devices Regulation. Under the Medical Devices Regulation, manufacturer is defined as the natural or legal person who: (i) manufactures or fully refurbishes a device or has a device designed, manufactured or fully refurbished; and (ii) markets that device under its name or trademark a much narrower definition of manufacturer82. In contrast, the notion of producer the Product Liability Directive entails a broader range of persons than the above notion of manufacturer. For instance, the person who imports into the Community a product for sale, hire, leasing or any form of distribution in the course of his business83 is considered as a producer under the Product Liability Directive, while under the Medical Devices Regulation this person should be characterized as an importer rather than a manufacturer. This demonstrates that different economic operators may be rendered liable as producers of defective medical devices under the Product Liability Directive whereas the Medical Devices Regulation attempts to determine transparently the obligations of every economic operator with the aim to enhance the regulatory compliance by the respective operator regarding their role in the supply chain84. However, as mentioned during the trilogue negotiations85 of the Medical Devices Regulation, an importer under the Medical Devices Regulation is likely to be held liable for defective medical devices under the Product Liability Directive86.

b) The liability of authorized representatives

The new Regulation sets stricter obligations to all the economic operators in the supply chain of medical devices and provides a list of requirements for the authorized representatives, the most crucial being their liability for defective devices on the same basis and jointly and severally with manufacturer87.

Article 2 defines ‘authorized representative’ as any natural or legal person established within the Union who has received and accepted a written mandate from a manufacturer, located

82 Article 2(30) of the Medical Devices Regulation (EC) 2017/745 (MDR)

83 Article 3(2) of the Product Liability Directive 85/374/EEC

84 Recital 27 of the Medical Devices Regulation (EC) 2017/745 (MDR)

85 Council of the European Union, Interinstitutional File 2012/0266 (COD), Reference 10682/2/15 REV 2 (3 September 2015), 15

86 Jelena Madir, HealthTech : law and regulation, 2020, Edward Elgar Publishing Limited, p 126-135

87 David Orentlicher, Tamara K. Hervey, The Oxford Handbook of Comparative Health Law, 2022 Oxford University Press, p 779-804

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