REGULATORY COMPLIANCE DEFENCE IN EUROPE

Mark Mildred

Nottingham Trent University

THE EXISTING LAW

• PL Directive: article 7(d) defence that• “The defect due to compliance of the

product with mandatory regulations issued by the public authorities”

• CPA s 4(1)(a): “that the defect is attributable to compliance with any requirement imposed by or under an enactment or with any Community obligation”

CASES

• No reported cases (?)

• Gammagard 1994

• Immunoglobulin used in primary immuno-deficiency

• Contaminated with hepatitis C virus

• Said to be as a result of manufacturing process mandated by FDA

THIRD REPORT ON PL DIRECTIVE

• COM(2006) 496 final, 14 September 2006• “Some stakeholders, and in particular

representatives of the pharmaceutical industry, have argued strongly for the introduction of a defence of regulatory compliance, which would apply to a product whose safety was closely regulated, provided that the product complied fully with the applicable regulations” (page 11).

REASONS FOR A RC DEFENCE

• Certainty for all• Avoiding: failed claims• And irrecoverable transaction costs (both sides)• And payment of damages• And waste of management time• And suppression of innovation• Promoting: lower premia so lower prices• And research for new products• Licensing Authority (“LA”) best judge of entitled

expectation

PRACTICAL REASONS AGAINST RC DEFENCE

• Few successful claims

• Discipline of risk-based claimants’ funding

• Adequate, stable and affordable insurance cover available

• No evidence that innovation is suppressed

PRINCIPLED REASONS AGAINST RC DEFENCE

• Potential errors of LA

• Inadequate disclosure to LA

• Premature disclosure to LA

• Continuing disclosure to LA (PMS)

• Making those decisions justiciable ? Leads to slower, more conservative licensing process with social costs

PRINCIPLED REASONS AGAINST RC DEFENCE

• Satellite litigation over disclosure process

• Or raised in main claim where LA has no locus

• What would be ambit of defence?

• Which products/industries are “closely regulated”?

• Necessity (and difficulty) of amending PLD

• Undermining fair apportionment of risk

A PLACE FOR PRE-EMPTION?

• Would EMEA mandate product information for all member states?

• Cumbersome and ?inappropriate

• Amend art 7(a) to provide defence where product marketed with mandated info?

• In US pre-emption limited to failure to warn

• Difficulty over categorisation of defect and ? cause of action