UK: Hepatitis C Judgment

The recent decision of Mr Justice Burton in the Hepatitis C litigation is the first decision of a English judge to comprehensively review the provisions of the UK legislation giving effect to the EU Product Liability Directive, the Consumer Protection Act 1987 ("CPA"). Burton J held that 114 people infected with Hepatitis C following blood transfusions were entitled to compensation from the National Blood Authority estimated to be in excess of 6 million pounds.

In a lengthy judgment, Burton J held that in determining whether or not the product was defective, the crucial question was the level of safety that persons generally are entitled to expect. Significantly, he ruled that the question of whether a harmful characteristic of the product was avoidable was irrelevant and that it was, therefore, wrong to consider what tests a producer could or should have used to minimise or reduce the risk.

The judge also ruled that the National Blood Authority could not rely on the development risks defence (Article 7(e) of the Directive). Once the possibility of contamination was or ought to have been known to the producer, the producer supplied the product at its own risk. This was the case regardless of whether it would have been possible for the producer to identify in which (if any) of a series of blood products the contamination would actually occur.

It is understood that the defendants have not appealed the High Court's decision.

114 claimants sought to recover damages arising out of their infection with Hepatitis C through blood transfusions from 1 March 1988. The transfusions were given during surgery or immediately after childbirth and, in one case, in the course of treatment for a blood disorder.

The claims were brought under the CPA against the National Blood Authority, which was responsible for overseeing 14 regional blood transfusion centres, and against the Velindre NHS Trust, which had a similar responsibility for the blood transfusion service in Wales.

Section 2 of the CPA imposes strict liability on the producer of a defective product that causes damage. The claimants' case was that all those who received blood infected with Hepatitis C after the CPA came into effect on 1 March 1988 were entitled to recover damages, irrespective of fault on the part of blood producers.

It was agreed that by the 1970s blood producers and the medical profession knew that there was a risk of infection by Hepatitis C in transfused blood and that some percentage of that blood (between 1% and 3% in the UK) was infected with Hepatitis C. However, no screening test to discover the presence of the virus in a donor’s blood was known of or available until 1989, and specific screening for Hepatitis C (which has all but eliminated the problem of infection through transfusion) was not introduced in the UK until 1991.

Although the claimants relied directly on the terms of the CPA as the basis of their action, both parties referred exclusively throughout the trial to the terms of the Directive, which was implemented in the UK by means of the CPA. Their decision to look to the Directive was clearly influenced by the judgment of the European Court of Justice (ECJ) in European Commission v. United Kingdom,¹ in which the Commission had sought to challenge the UK Government’s implementation of the terms of the Directive. Although the Commission’s application was dismissed, the ECJ suggested that, in any future decisions made in relation to the precise terms of the CPA, it expected the CPA to be construed so as to be consistent with the Directive.

The relevant Articles of the Directive are as follows:

Article 6

"6.1A product is defective when it does not provide the safety which a person is entitled to expect, taking all circumstances into account, including:

1. the presentation of the product;
2. the use to which it could reasonably be expected that the product would be put;
3. 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."

Article 7

"The producer shall not be liable as a result of this Directive if he proves:

…

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…"

The parties had reached certain areas of common ground in respect of both Article 6 (defect) and the applicability of Article 7(e) (development risks). In relation to Article 6, the common ground was as follows:

• Liability was "defect-based" and not "fault-based".
• The purpose of the Directive was to achieve a higher and consistent level of consumer protection throughout the Community and render recovery of compensation easier without the need for proof of negligence.
• The onus of proof was on the claimants to prove that the product was defective.
• The crucial question to be resolved by the court was the level of safety that persons generally are entitled to expect. "[T]he test was not that of an absolute level of safety, nor an absolute liability for any injury caused by the harmful characteristic".
• The expectation in question was that of persons generally, or of the public at large.
• Safety was not what was actually expected by the public at large but what they were "entitled to expect taking all circumstances into account". Again, the crucial question was the legitimate expectation of persons generally.
• It was for the court to decide what the public was entitled to expect. It would do so as "an informed representative of the public."
• There were some products, which had harmful characteristics in whole or in part, about which no complaint could be made, eg products with had obviously dangerous characteristics such as knives, guns, alcohol and tobacco.

The test under Article 6.2 had to be applied as at the date when the product was put into circulation.

In relation to Article 7(e) the common ground was as follows:

• The state of scientific and technical knowledge referred to was the most advanced available (to anyone, not simply to the producer in question). However, on the basis of the opinion of the Advocate General in Commission v UK, it must be "accessible". (The Advocate General had distinguished between a study carried out by a researcher in a university in the United States and published in an International English Language Journal and similar research carried out by an academic in Manchuria published in the local Scientific Journal in Chinese which did not go outside the boundaries of the region. Burton J took the Manchurian example to mean an "unpublished document or unpublished research not available to the general public, retained within the laboratory or research department of a particular company." This sort of knowledge would not be considered "accessible".)
• Article 7(e) was not concerned with the conduct or knowledge of individual producers.
• The relevant time for the purposes of assessing the state of such scientific and technical knowledge was the time when the product was put into circulation.
• In this case "defect" for the purposes of Article 7(e) was "the infection by Hepatitis C."

The claimants argued that, as the Directive imposed liability regardless of fault, the question of whether the risk of contamination could have been avoided was irrelevant to the issue of whether the blood was defective for the purposes of Article 6. Although the risk was known to the medical profession, it was not known to the public at large and they could not therefore be said generally to have had an expectation of that risk.

The defendants contended that although the medical profession was aware of the risk, "avoiding the risk was impossible and unattainable." The public did not and was not entitled to expect 100% clean blood. All they were entitled to expect was that all reasonably available precautions had been taken. It was, therefore, right to take questions of avoidability into account in relation to Article 6. The defendants also argued that, when looking at the product and deciding what level of safety could reasonably have been expected, it was essential to consider what precautions or tests could or should have been used. In response, the claimants argued that considering what safety precautions could or should have been adopted by the producer was an impermissible and irrelevant exercise that "allowed questions of fault back in by the back door." In their view, it was necessary to look only at the product itself.

Burton J concluded that the blood products were defective under Article 6 in so far as they "did not provide the safety which persons generally are entitled to expect". Specifically:

• Society did not know or accept that there was a risk that transfused blood might be infected with Hepatitis C. The blood was not the kind of product that by its very nature carries a risk.
• The question of "avoidability" was not one of the circumstances to be taken into account in respect of Article 6.
• The products were defective because the public at large was entitled to expect that blood transfused to them would be free from infection.
• The question was one of legitimate expectation. The avoidability of the harmful characteristic, the impracticality of taking precautions, the benefit to society or the utility of the product and the knowledge of the medical profession were all irrelevant considerations because they were inconsistent with the purpose of the Directive.

Burton J indicated that in determining whether a party could rely on the development risks defence, it had to be decided:

It was common ground that the risk of the existence of the Hepatitis C virus in blood generally was known at all relevant times. The claimants argued that a known but unavoidable risk did not qualify for protection under Article 7(e) as once the risk was known, the product was supplied at the producer’s own risk. To rely on the development risks defence the defendants would have to show that the risk had not been identified.

The defendants, on the other hand, contended that it was sufficient to show that, although the risk was known, there was no knowledge that would have enabled a producer to discover the existence of the defect in a particular product.

Burton J sided with the claimants, concluding that as the risk of Hepatitis C infection was known, the defendants could not rely on the development risks defence under Article 7(e). Once the risk of a defect was known, then there was a risk of that defect materialising in any particular product. In Burton J's view it was inconsistent with the purpose of the Directive for a producer to continue to supply a product with a known risk simply because he was unable to identify in which, if any, of his products that defect might occur or recur.

In reaching his conclusions on Article 7(e), Burton J was guided by the decision in Commission v. UK, where it was said that:

This is an important decision for a number of reasons. It has long been thought that the Product Liability Directive was implemented in the UK through the CPA in a way that favoured producers by adopting standards that were more akin to negligence, particularly when it came to the concept of defect and the development risks defence. The CPA has always been regarded as more favourable to producers than the Directive itself. If Burton J's approach of going straight to the Directive (and effectively ignoring the terms of the CPA) is adopted more widely, defendants will be deprived of the more favourable wording of the CPA.

The Judge took a particularly strict approach to determining whether a product contained a defect, excluding considerations that would appear to have been contemplated by the Directive as well as the CPA. He ruled out for example questions of the benefit that the product provided to society as a whole and what the medical profession knew at the time of its risks. The exclusion of the knowledge of a "learned intermediary" is perhaps one of the most controversial aspects of his decision. This is likely to have far reaching consequences for manufacturers of pharmaceutical products that are known within the medical profession to have certain side effects but that the consumer nonetheless expects will be safe. In the words of one of the lawyers acting for the National Blood Authority:

Burton J's judgment has been hailed as a landmark decision for consumer rights. What is clear is that any suggestion that there should be a "negligence-style" interpretation of the Directive has been well and truly rejected.

1 [1997] ALL ER(EC) 481