European Union: Product Liability For Medicines And Medical Devices In The European Union

Last Updated: 13 June 2016
Article by Wolfgang Rehmann and Diana Heimhalt

Across the European Union, medicines and medical devices are subject to the general product liability rules of the EU member states. An exception applies to Germany and, to a limited extent, to Spain and a few other jurisdictions, whose national laws provide for particularly strict liability regimes that specifically apply to medicines. Within the European Union, the general product liability laws are based on (i) a strict liability regime (without fault) under the national laws of the member states implementing the EU Product Liability Directive 85/374/EC ("the Directive"), and (ii) supplemental fault-based liability systems (negligence) under the national laws of torts of practically all EU member states. Both liability regimes apply in parallel. While it is generally easier for a claimant to establish a claim under the strict liability regime of the Directive, fault-based liability (negligence) continues to play a role in cases where a claimant seeks to recover damages beyond the limitations and liability caps that apply under the Directive (see below).

The strict product liability rules across all member states can nowadays be described as harmonized if not even as rather homogenous, in particular as the Directive does not allow for substantive deviations.

"Products" within the meaning of the Directive are "all movables even though incorporated into another moveable or into an immovable". This rather wide definition includes all finished goods as well as raw materials and components incorporated in a finished product. The product does not have to be a consumer product. Because of the wide scope of the definition, the standards established under the Directive apply to almost all medicines and medical devices. Yet, custom made drugs or devices do typically not fall within the scope of the Directive as the Directive only covers products that have been industrially produced.

Under the Directive, liability principally rests upon "the producer" of the defective product, component part or raw material. However, Article 3 of the Directive extends the definition of "the producer" to include:

  • any person who, by putting his/her name, trade mark or other distinguishing feature on the product, presents himself/herself as the producer;
  • any importer which has imported the defective product, component or raw material into the European Union market; and
  • any supplier (e.g. the retailer, distributor or a wholesaler) if the producer cannot be identified.

This broad definition of the "producer" seeks to ensure that, if the "producer" of the defective product (or a defective component part or raw material) is located outside the European Economic Area (EEA), an injured party will always be able to hold an EEA-based company responsible for his or her injury. The "producer" of the finished product and the "producer" of the defective component part or raw material can be held jointly and severally liable.

The strict liability regime imposed in the Directive sets out three core requirements for establishing liability on the part of the producer:

  • a product defect,
  • damage
  • and a causal link between these two.

To determine whether a product is defective a "reasonable safety expectation"-test applies under the Directive: A product is deemed to be defective if it does not provide the safety that consumers generally are entitled to expect taking all of the circumstances into account, including the presentation of the product, its use that could be reasonably expected and the time when the product was put into circulation (Article 6 of the Directive). In a decision of March 2015, the European Court of Justice has arguably significantly enlarged the concept of a "product defect" under the Directive with regard to implantable medical devices. The court held that a potential defect in pacemakers and implantable cardioverter defibrillators could lead to the conclusion that all devices of the same model/series are defective. In this case, the claimant only needs to prove that there was an increased number of device failures in the same batch or series and no longer needs to proof that the individual implant he or she had received suffered from a pertinent defect.

A product shall not be considered defective for the sole reason that a better (safer) product is subsequently put into circulation. This means that the defectiveness of a product is measured against an objective standard and it is irrelevant what level of safety the individual claimant expected. A key issue with medical devices is whether the way in which the product is presented, including the information and warnings given by the producer, provides consumers (and not only healthcare professionals) with adequate understanding of its inherent dangers.

The Directive applies to damages caused by death or by personal injuries. Liability is generally not capped. However, member states may 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 defect. German law, for example, has set this total liability cap at 85 million EUR (higher caps apply with regard to drugs). Under the Directive, damage to property is only recoverable with regard to items of property other than the product itself, and to items intended for private use or consumption. The afore-mentioned limitations apply to claims under the strict liability regime of the Directive only. As the fault-based liability regimes under the respective national laws of torts apply in parallel, a claimant may seek to recover damages beyond these limitations under these fault-based liability regimes (negligence).

In general, the burden of proof is placed upon the injured party insofar as the damage, the defect and the causal relationship between the two is concerned (Article 4 of the Directive). The claimant needs to prove that the product is defective, that he or she has been injured and that there is a causal link between the defect and the injury.

The Directive contains a few defences which the producer can raise (Article 7 of the Directive). The burden of proof for these defences lies upon the producer. The producer may avoid liability if he can show that:

  • he did not put the product into circulation;
  • the circumstances of the respective case justify the assumption that the defect which caused the damage did not exist at the time when the product was put into circulation by the respective producer or that this defect came into being afterwards;
  • it did not manufacture the product for profit-making sale or any form of distribution with an economic intent;
  • the defect is due to compliance of the product with mandatory regulations issued by the public authorities;
  • the state of scientific and technical knowledge at the time when the respective producer put the product into circulation was not such as to enable the existence of the defect to be discovered ("state of the art"-defence); or
  • in the case of a manufacturer of a component part; 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 producer of the product.

Furthermore, under both the Directive and in negligence the liability of the producer can be limited if the producer can prove that the consumer´s negligence caused or contributed to the damage.

Liability under the Directive will expire after three years starting from the date on which the claimant became aware or reasonably could have become aware of the damage and its cause, the defect and the identity of the producer. In addition, a long stop-halt applies: irrespective of knowledge or constructive knowledge, a producer´s liability expires ten years from the date on which the product was put in circulation (Article 10 of the Directive). Yet, again, different limitation periods can apply under the fault-based liability regimes of the laws of tort (negligence) of the Member States.

While the substantive product liability laws of all EU member states are largely harmonized under the EU Product Liability Directive, the national procedural laws and court practice of the members states which apply, among others, in product liability litigation can differ quite significantly. In particular, several features which may be considered as typical for U.S. litigation in this sector, do generally not exist in the European Union, e.g., outside the common law-jurisdictions (Ireland, and the UK) there is no pre-trial discovery, there are no jury trials, and no punitive damages are available. Also, there are no US-style class action procedures even if a few member states have recently introduced various other forms of collective consumer redress. Generally speaking, one can say that while European substantive product liability rules are largely similar to the substantive U.S. laws, the overall litigation risks of a producer are generally lower in most EU members states because of differences in the their procedural laws and practices.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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