Short Reads

Product liability under Directive 85/374: a potential defect, is a defect too

Product liability under Directive 85/374: a potential defect, is a defect too

Product liability under Directive 85/374: a potential defect, is a defect too

02.12.2015 NL law

In its decision of 5 March 2015 (joined cases C-503/13 and C-504/13), in reply to preliminary questions of the German Bundesgerichtshof, the European Court of Justice (ECJ) clarified that under Directive 85/374 an implantable medical device can be considered defective for the mere reason that the product belongs to a group or series of products that has a potential risk of being defective. If the product belongs to that group or series of products, there is no need to establish that the individual product actually suffers from that defect as well.

In 2005, Boston Scientific, a producer of medical devices, found that a particular type of pacemaker it produced had a substantially higher chance of being defective than normal according to its own standards. As a result, Boston Scientific recommended that physicians replace the pacemakers, which would be provided free of charge. Around the same time, Boston Scientific also found that a particular type of implantable cardioverter defibrillator might be affected by a defect as well. Therefore, Boston Scientific recommended that physicians mitigate the consequences of such potential defect by deactivating a certain switch of the implantable cardioverter defibrillator.

Although the pacemakers were free of charge and the implantable cardioverter defibrillator did not need to be replaced, the patients (or their health insurers) still incurred  the costs of the surgery and hospital stay. For this reason, two of the health insurers (AOK Sachsen-Anhalt-Gesundheidskasse and Betriebskrankenkasse RWE) involved decided to seek recourse against Boston Scientific for damages for death and personal injury under article 9(1) of the Directive, as transposed into German product liability law.

During the legal proceedings before the German courts, Boston Scientific disputed that the pacemakers and implantable cardioverter defibrillators involved were defective.

Under article 4 of the Directive, the burden of proving the defect, the damage and the causal relationship between defect and damage lies with the injured person and, following subrogation, with their health insurers. As the pacemakers were destroyed after their removal without any expert examination, the health insurers would have severe difficulties in proving any defect. After all, these pacemakers and the implantable cardioverter defibrillator were not removed because they had a defect, they were removed because the possibility  of these devices having a defect was higher than normal according to Boston Scientific’s standards.

After the health insurers won the case before the German courts in two instances, the German Bundesgerichtshof decided to ask the ECJ preliminary questions about – in short – the interpretation of the notions of “defect” and “death and personal injury” under the Directive, in the context of this case.

The ECJ ruled that to establish whether a product is defective, according to article 6(1) of the Directive, all circumstances must be taken into account including the presentation of the product, how it could reasonably be expected to be used and when it was put into circulation. The safety one may expect from a product is to be established by considering the purpose of the product. Given the purpose and in light of the particularly vulnerable situation of the patients using pacemakers and implantable cardioverter defibrillators, the ECJ stated that the safety requirements for these devices, which such patients are entitled to, are particularly high.

The potential lack of safety which would give rise to liability of the producer under the Directive, for this type of product, stems from the abnormal potential for damage which those products might cause to the person concerned. If the products involved belong to the same group or form part of the same production series that have a potential defect, it is possible to classify all the products of that group or series as defective without there being any need to prove that the individual product is defective as well. If and in so far as surgery and hospital stay is necessary to overcome the defect in that device in the product in question, the ECJ considers these costs damage caused by death or personal injury to be borne by the producer.

As a consequence of this decision, producers must be aware that, depending on the nature of their product, under certain circumstances they may need to compensate consumers for damages following a product recall, even where the individual products may not be defective.

In the Netherlands, it is less likely that health insurers will be able to successfully claim damages on the basis of Directive 85/374 in a similar case. Article 1 of the Directive is transposed into Dutch law by means of article 6:185 Dutch Civil Code (DCC) (liability for defective products). Under Dutch law (article 6:197 DCC), a Dutch insurer that has paid out the insurance proceeds to the person insured having recourse against the producer of defective products under article 6:185 DCC is explicitly excluded.

However, Dutch health insurers may be entitled to claim damages under article 6:162 DCC (liability for an unlawful act). In the event of a claim based on article 6:162 DCC, the health insurer has to prove that the producer of the device has committed an attributable unlawful act which has resulted in damages. This makes the threshold for a successful claim for damages on the basis of article 6:162 DCC, possibly higher than for a claim under 6:185 DCC.

The post Product liability under Directive 85/374: a potential defect, is a defect too is a post of stibbeblog.nl

Team

Related news

18.08.2020 NL law
Kwart eeuw faillisementsafwikkeling en boedelschulden

Articles - Ter gelegenheid van haar 25-jarig jubileum nodigde het Tijdschrift voor Insolventierecht Gertjan Boekraad uit een bijdrage te schrijven over hoe het recht zich in een kwart eeuw heeft ontwikkeld op het gebied van de Faillissementsafwikkeling. Aan bod komen vragen als: wat zijn boedelschulden, hoe worden zij omgeslagen en hoe wordt een negatieve boedel afgewikkeld? 

Read more

18.08.2020 NL law
Quarter century bankruptcy settlement and estate debts

Articles - To mark the publication’s 25th anniversary, the editors of the Dutch Journal for Insolvency Law have invited Gertjan Boekraad to author an article on how the issue of bankruptcy settlement has developed in legal doctrine over the past quarter of a century. He discusses questions including: what are estate debts, how can they be paid in advance, and what if the assets do not completely cover the estate debts? 

Read more

08.07.2020 NL law
Dutch State breached duty of care in providing information to victims and surviving relatives of plane crash

Short Reads - Earlier this year, the District Court in The Hague ruled that the Dutch State is liable vis-à-vis the victims and surviving relatives of a 1992 plane crash in Faro, Portugal. The State was found liable because it is responsible for the information provided by the Dutch Aviation Safety Board (a government agency) to the victims and surviving relatives. This information, on the causes of the crash was deemed by the court to be incorrect and incomplete.

Read more