British Institute for International & Comparative LawBritish Institute for International & Comparative LawBritish Institute for International & Comparative LawBritish Institute for International & Comparative LawBritish Institute for International & Comparative LawBritish Institute for International & Comparative LawBritish Institute for International & Comparative LawBritish Institute for International & Comparative Law

Product Liability & Mass Torts in a Global MarketplaceProduct Liability & Mass Torts in a Global MarketplaceProduct Liability & Mass Torts in a Global MarketplaceProduct Liability & Mass Torts in a Global MarketplaceProduct Liability & Mass Torts in a Global MarketplaceProduct Liability & Mass Torts in a Global MarketplaceProduct Liability & Mass Torts in a Global MarketplaceProduct Liability & Mass Torts in a Global MarketplaceLondon London London London London London London London –––––––– 7 June 20077 June 20077 June 20077 June 20077 June 20077 June 20077 June 20077 June 2007

Regulation and Product Liability Regulation and Product Liability Regulation and Product Liability Regulation and Product Liability Regulation and Product Liability Regulation and Product Liability Regulation and Product Liability Regulation and Product Liability The European ApproachThe European ApproachThe European ApproachThe European ApproachThe European ApproachThe European ApproachThe European ApproachThe European Approach

Dr Duncan Fairgrieve, BIICL, 1 Crown Office RowDr Duncan Fairgrieve, BIICL, 1 Crown Office RowStefan Stefan LenzeLenze, Lovells, Lovells

Overview Overview Overview Overview Overview Overview Overview Overview

�� Changing environment for product liability litigationChanging environment for product liability litigation�� The European product liability directive and regulatory The European product liability directive and regulatory

compliancecompliance�� Case law on compliance and nonCase law on compliance and non--compliancecompliance�� Regulatory compliance and pharmaceuticals Regulatory compliance and pharmaceuticals

Overview Overview Overview Overview Overview Overview Overview Overview

�� Changing environment for product liability litigationChanging environment for product liability litigation�� The European product liability directive and regulatory The European product liability directive and regulatory

compliancecompliance�� Case law on compliance and nonCase law on compliance and non--compliancecompliance�� Regulatory compliance and pharmaceuticals Regulatory compliance and pharmaceuticals

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

Europe Europe Europe Europe Europe Europe Europe Europe

““““““““Bring me your Bring me your Bring me your Bring me your Bring me your Bring me your Bring me your Bring me your CLASS ACTIONSCLASS ACTIONSCLASS ACTIONSCLASS ACTIONSCLASS ACTIONSCLASS ACTIONSCLASS ACTIONSCLASS ACTIONS””””””””

FundingFundingFundingFundingFundingFundingFundingFunding

March 2007: German

Federal Constitutional

Court: Ban of

contingency fees not in

line with constitution

The European product liability directive The European product liability directive The European product liability directive The European product liability directive The European product liability directive The European product liability directive The European product liability directive The European product liability directive and regulatory complianceand regulatory complianceand regulatory complianceand regulatory complianceand regulatory complianceand regulatory complianceand regulatory complianceand regulatory compliance�� Regulatory compliance Regulatory compliance defencedefence rejected in the legislative rejected in the legislative

process of Directive 85/374/EECprocess 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 Commission an area the Commission wants to wants to ““monitormonitor””

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

The relevant provisions The relevant provisions The relevant provisions The relevant provisions The relevant provisions The relevant provisions The relevant provisions The relevant provisions

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

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

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

French Civil Code French Civil Code -- Article 1386Article 1386--1010

�� «« Le producteur peut être responsable du dLe producteur peut être responsable du dééfaut alors faut alors même que le produit a même que le produit a ééttéé fabriqufabriquéé dans le respect des dans le respect des rrèègles de l'art ou de normes existantes ou qu'il a fait gles de l'art ou de normes existantes ou qu'il a fait l'objet d'une autorisation administrative.l'objet d'une autorisation administrative. »»

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

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

NonNonNonNonNonNonNonNon--------compliancecompliancecompliancecompliancecompliancecompliancecompliancecompliance

�� Pollard v Tesco Stores Ltd Pollard v Tesco Stores Ltd [[2006] EWCA 2006] EWCA CivCiv 393393-- Violation of Violation of nonnon--bindingbinding British Standard British Standard isis not conclusive proof not conclusive proof

of of defectdefect-- ActualActual consumer expectations consumer expectations ≠≠ productproduct standard standard

�� District Court of DDistrict Court of Düüsseldorf 24 EPLR 2006, 20sseldorf 24 EPLR 2006, 20-- Violation of binding regulations is conclusive proof of defectViolation of binding regulations is conclusive proof of defect-- Legitimate expectationsLegitimate expectations-- In line with In line with §§ 4 (a) Restatement Third of Torts: Products Liability4 (a) Restatement Third of Torts: Products Liability

ComplianceComplianceComplianceComplianceComplianceComplianceComplianceCompliance

Cologne Court of Appeal (Cologne Court of Appeal (HariboHaribo) 21 EPLR 2005, 34) 21 EPLR 2005, 34�� Compliance is no automatic Compliance is no automatic defencedefence�� 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-- upup--to dateto date-- outcome of expert analysis outcome of expert analysis

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

Regulatory compliance and Regulatory compliance and Regulatory compliance and Regulatory compliance and Regulatory compliance and Regulatory compliance and Regulatory compliance and Regulatory compliance and pharmaceuticalspharmaceuticalspharmaceuticalspharmaceuticalspharmaceuticalspharmaceuticalspharmaceuticalspharmaceuticals

European Medicines Agency European Medicines Agency European Medicines Agency European Medicines Agency European Medicines Agency European Medicines Agency European Medicines Agency European Medicines Agency -------- EMEAEMEAEMEAEMEAEMEAEMEAEMEAEMEA

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

�� Centralized expert evaluation of risks v benefitsCentralized expert evaluation of risks v benefitsScientific resources of over 40 national competent authorities iScientific resources of over 40 national competent authorities in 30 n 30 EU and EEAEU and EEA--EFTA countries in a network of over 4,000 European EFTA countries in a network of over 4,000 European expertsexperts

EMEA EMEA EMEA EMEA EMEA EMEA EMEA EMEA -------- AuthorisationAuthorisationAuthorisationAuthorisationAuthorisationAuthorisationAuthorisationAuthorisation of of of of of of of of labellinglabellinglabellinglabellinglabellinglabellinglabellinglabelling

�� Major labelling variations require prior authorisation (EC Major labelling variations require prior authorisation (EC EC 1084/2002 and EC1085/2003EC 1084/2002 and EC1085/2003

�� 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 EMEA EMEA EMEA EMEA EMEA EMEA EMEA -------- Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum harmonisationharmonisationharmonisationharmonisationharmonisationharmonisationharmonisationharmonisation

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

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

ConclusionConclusionConclusionConclusionConclusionConclusionConclusionConclusion

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

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