British Institute for International & British Institute for International & Comparative LawComparative Law

Product Liability & Mass Torts in a Global Product Liability & Mass Torts in a Global MarketplaceMarketplace

London – 7 June 2007London – 7 June 2007

Regulation and Product Regulation and Product Liability Liability

The European ApproachThe European Approach

Dr Duncan Fairgrieve, BIICL, 1 Crown Office RowDr Duncan Fairgrieve, BIICL, 1 Crown Office RowStefan Lenze, LovellsStefan Lenze, Lovells

Overview Overview

Changing environment for product liability Changing environment for product liability litigationlitigation

The European product liability directive and The European product liability directive and regulatory complianceregulatory compliance

Case law on compliance and non-complianceCase law on compliance and non-compliance Regulatory compliance and pharmaceuticals Regulatory compliance and pharmaceuticals

Overview Overview

Changing environment for product liability Changing environment for product liability litigationlitigation

The European product liability directive and The European product liability directive and regulatory complianceregulatory compliance

Case law on compliance and non-complianceCase law on compliance and non-compliance Regulatory compliance and pharmaceuticals Regulatory compliance and pharmaceuticals

Changing Environment Changing Environment for Product Liability for Product Liability Litigation in Europe Litigation in Europe

““Bring me Bring me your your

CLASS CLASS ACTIONSACTIONS””

FundingFunding

March 2007: German Federal Constitutional Court: Ban of contingency fees not in line with constitution

The European product liability The European product liability directive and regulatory directive and regulatory compliancecompliance Regulatory compliance defence rejected in the Regulatory compliance defence rejected in the

legislative process of Directive 85/374/EEClegislative process of Directive 85/374/EEC

Third Report of EU Commission (September 2006)Third Report of EU Commission (September 2006)- Regulatory compliance defence isRegulatory compliance defence is an area the an area the

Commission wants to “monitor” Commission wants to “monitor”

- ““Some stakeholders, and in particular representatives of Some stakeholders, and in particular representatives of the pharmaceutical industry, have argued strongly for the pharmaceutical industry, have argued strongly for the introduction of a defence of regulatory compliance, the introduction of a defence of regulatory compliance, which would apply to a product whose safety was closely which would apply to a product whose safety was closely regulated, provided that the product complied fully with regulated, provided that the product complied fully with the applicable regulations.”the applicable regulations.”

The relevant provisions The relevant provisions

Article 7Article 7The producer shall not be liable (...) if he proves (...) that The producer shall not be liable (...) if he proves (...) that the defect is the defect is due to compliancedue to compliance of the product with of the product with mandatory regulations issued by the public authoritiesmandatory regulations issued by the public authorities

Section 4 Consumer Protection ActSection 4 Consumer Protection Act(...) in respect of a defect in a product it shall be a (...) in respect of a defect in a product it shall be a defence for him to show that the defect is defence for him to show that the defect is attributableattributable to compliance with any requirement imposed by or to compliance with any requirement imposed by or under any enactment or with any Community obligationunder any enactment or with any Community obligation

Article 6Article 6A product is defective when is does not provide the A product is defective when is does not provide the safety which a person is safety which a person is entitledentitled to expect, taking all to expect, taking all circumstances into account (...) circumstances into account (...)

French Civil Code - Article 1386-French Civil Code - Article 1386-10 10 

« Le producteur peut être responsable du défaut « Le producteur peut être responsable du défaut alors même que le produit a été fabriqué dans le alors même que le produit a été fabriqué dans le respect des règles de l'art ou de normes respect des règles de l'art ou de normes existantes ou qu'il a fait l'objet d'une autorisation existantes ou qu'il a fait l'objet d'une autorisation administrative. »administrative. »

““A producer may be liable for a defect although A producer may be liable for a defect although the product was manufactured in accordance with the product was manufactured in accordance with the rules of the trade or of existing standards or the rules of the trade or of existing standards or although it was the subject of an administrative although it was the subject of an administrative authorization.” authorization.”

European Case law on European Case law on regulations and product liabilityregulations and product liability

Non-complianceNon-compliance

Pollard v Tesco Stores Ltd Pollard v Tesco Stores Ltd [[2006] EWCA Civ 3932006] EWCA Civ 393- Violation of non-binding British Standard is not Violation of non-binding British Standard is not

conclusive proof of defectconclusive proof of defect- Actual consumer expectations Actual consumer expectations ≠ product standard ≠ product standard

District Court of Düsseldorf 24 EPLR 2006, 20District Court of Düsseldorf 24 EPLR 2006, 20- Violation of binding regulations is conclusive proof of Violation of binding regulations is conclusive proof of

defectdefect- Legitimate expectationsLegitimate expectations- In line with § 4 (a) Restatement Third of Torts: Products In line with § 4 (a) Restatement Third of Torts: Products

LiabilityLiability

ComplianceCompliance

Cologne Court of Appeal (Haribo) 21 EPLR 2005, 34Cologne Court of Appeal (Haribo) 21 EPLR 2005, 34

Compliance is no automatic defenceCompliance is no automatic defence Compliance is strong evidence that product is not Compliance is strong evidence that product is not

defectivedefective Compliance in this case conclusive evidence because Compliance in this case conclusive evidence because

the relevant regulations were the relevant regulations were - exhaustiveexhaustive- up-to dateup-to date- outcome of expert analysis outcome of expert analysis

In line with § 4 (b) of Restatement Third of Torts: In line with § 4 (b) of Restatement Third of Torts: Products Liability Products Liability

Regulatory compliance and Regulatory compliance and pharmaceuticalspharmaceuticals

European Medicines Agency - European Medicines Agency - EMEAEMEA

Authorisation of medicinal products centralized Authorisation of medicinal products centralized procedure (EC 2309/93) and responsibilities in procedure (EC 2309/93) and responsibilities in mutual recognition procedure (Art. 27 ff Dir mutual recognition procedure (Art. 27 ff Dir 2001/83 EC)2001/83 EC)

Centralized expert evaluation of risks v benefitsCentralized expert evaluation of risks v benefitsScientific resources of over 40 national competent Scientific resources of over 40 national competent authorities in 30 EU and EEA-EFTA countries in a network of authorities in 30 EU and EEA-EFTA countries in a network of over 4,000 European expertsover 4,000 European experts

EMEA - Authorisation of EMEA - Authorisation of labellinglabelling

Major labelling variations require prior Major labelling variations require prior

authorisation (EC EC 1084/2002 and authorisation (EC EC 1084/2002 and

EC1085/2003EC1085/2003

Urgent safety restrictionUrgent safety restriction- agency has 24 h to review and approveagency has 24 h to review and approve

- subsequent variation procedure requiring approvalsubsequent variation procedure requiring approval

EMEA rules stricter than FDA rulesEMEA rules stricter than FDA rules

EMEA - Maximum EMEA - Maximum harmonisationharmonisation

Harmonisation of pharmaceutical product Harmonisation of pharmaceutical product throughout EU throughout EU ““uniform decisions throughout the Community”uniform decisions throughout the Community” (EC 2309/93)(EC 2309/93)

Optimum level of safetyOptimum level of safety““(...) a single scientific evaluation of the highest (...) a single scientific evaluation of the highest possible standard of the quality, safety and possible standard of the quality, safety and efficacy”efficacy” (EC 2309/93) (EC 2309/93)

ConclusionConclusion

Executive and judiciaryExecutive and judiciary Effect on regulatory process - Effect on regulatory process -

damages liability of regulator damages liability of regulator Article 6 ECHR reviewArticle 6 ECHR review Satellite litigationSatellite litigation Divide b/w civil liability & regulatory Divide b/w civil liability & regulatory

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