Now here is an important case for the medical devices industry. Although product liability litigation has not (yet) evolved into the type of bet the company litigation it can be in the United States and cases about interpretation of the Product Liability Directive have been few, they do shape the scope of no fault liability in the EU of manufacturers of medical devices for their products.
No earlier EU cases about product liability for medical devices
In this present case, C‑495/10 Centre hospitalier universitaire de Besançon versus Thomas Dutrueux,Caisse primaire d’assurance maladie du Jura, the Advocate General has just issued his opinion on 27 October 2011 and as you will have noticed if you clicked on the link to the opinion, it is not (yet) available in English, although it is available in among others German, French, Spanish and Italian. So for those that do not read any of those languages, nor Estonian, Latvian, Greek, Portuguese, Finnish or Swedish either, I will summarise. As a result, this post will be longer than you are used to from me. A good summary is also provided in the English version of the Court’s press release about the AG’s conclusion.
The case involves a medical device indirectly, which is a novelty in itself as the only really relevant previous product liability directive cases on substantive points of law so far were about medicinal products. This case concerned a patient suffering burns from a malfunctioning electrical matrass used during surgery.
The French hospital was subsequently found liable for this because the French rules that implemented the EU product liability directive have been interpreted as to instate a no-fault liability for hospitals for damages suffered by patients as a result of devices used by the hospital in the course of treatment and care, even if the hospital was not to blame for the malfunction (see points 7 and 8 of the conclusion).The hospital contested this on appeal, arguing that the ‘closed system’ of no-fault liability for products under the EU product liability excluded this type of liability to be imposed on a medical care service provider. The French appeal court decided to check this with the European Court and asked the European Court the following question:
“Does Directive 85/374 limit the possibility for Member States to define the liability of persons who use defective equipment or products while providing services and, in so doing, cause damage to the recipient of those services?”
If so, the French court wanted to know if the EU product liability directive permits
” the implementation of a liability system based on the special situation of patients in public health establishments, in so far as it recognises, inter alia, that they have the right to obtain from such establishments, even in the absence of fault on the part of those establishments, compensation for injury caused by the failure of products and equipment which they use, without prejudice to the possibility for the establishment to seek indemnity from the producer”
In fact the French court asked the two questions the other way around, but I agree with the AG that this order is more meaningful for answering the questions.
Can EU member states have rules for no-fault liability of service providers that use defective equipment?
As to the first question the AG finds that there would be two theoretical cases in a service provider that uses a defective product in the provision of the service could be liable under the EU product liability directive:
- the service provider is liable under article 3 (3) of the directive as “each supplier” in case the producer of the product cannot be identified; or
- service providers are somehow included in the group of potentially liable parties under the product liability directive
The AG finds that article 3 (3) only applies to suppliers forming part of the actual distribution chain of the device, and not to any end users like the service provider using a product that turns out defective (points 28-31). He bases this conclusion on an interpretation by analogy based on another EU directive concerned with product safety and which field of application flanks that of the product liability directive, the General Product Safety Directive. That directive does specify in recital 9 that it
“does not cover services, but in order to secure the attainment of the protection objectives in question, its provisions should also apply to products that are supplied or made available to consumers in the context of service provision for use by them. The safety of the equipment used by service providers themselves to supply a service to consumers does not come within the scope of this Directive since it has to be dealt with in conjunction with the safety of the service provided.”
The same is true under the product liability directive, argues the AG: the use of products in the provision of a service must be dealt with in relation to the liability for the service as such, which is outside the scope of the product liability directive.
The AG finds that service providers are not among those persons potentially liable under the product liability directive either, as this group is a closed system according to the case law of the European Court and the Court never expanded the group of liable persons to include service providers, although it had the opportunity to do so in at least one case (points 35-39). Furthermore, the Court has always been explicit in that the product liability directive did not apply outside the scope of what it regulated explicitly and that this did not include liability of service providers for defective products (point 43).
Ergo, no liability for service providers for defective products used in the provision of the service on the basis of the product liability directive says the AG. Mind you, the court’s case law also provides that other forms of liability not related to products and/or having another basis than no-faut liability (e.g. based on negligence) still remain possible.
In case the Court disagrees, the AG submits that the Court should answer the second question.
What about a no-fault liability system based on the special situation of patients in public health establishments?
If service providers are not liable directly, does the product liability directive exclude a system that allows patients hat they have the right to obtain, even in the absence of fault on the part of the service provider, compensation for injury caused by the failure of products and equipment which they use, without prejudice to the possibility for the establishment to seek indemnity from the producer? The answer to this question depends on the legal basis of such a system. Is it the same as the product liability directive, then it is excluded. If not, it is allowed, says the AG (point 51-52).
The AG points out that the referring court is of the opinion that the legal basis of the French rules concerned is not the product as such, but rather the special relationship between the hospital and the patient, resulting in the definition of a group of liable persons other than under the product liability directive, and consequently in a distinct legal basis (point 57).
However, the logical consequence of this is that if the European Court should disagree with this analysis of the legal base, then it must find that the French rules do have the same legal base, thereby expand no-fault liability for defective products to service providers and are consequently preempted by the product liability directive.
Analysis and context
The AG’s opinion is, in my opinion, neither controversial nor revolutionary and I expect a judgment from the European Court along the same lines. We will be sure about this in a couple of months, when the European Court will hand down its judgment. Statistics do show that the European Court follows its AG in the large majority of cases.
Yet the case is important for the medical devices industry as AG’s opinion, and likely the Court’s judgment, confirms the line of case law with respect to the use of products in the course of the provision of medical services as it was set out in the Veefald vs Århus case from 2001. That case concerned the question if a hospital could be liable for a product manufactured and applied by it in the course of the provision of a medical service (in that case: production of perfusion fluid to be used in a kidney transplant procedure). In that case it was not disputed that the product was defective, but only whether it had been ‘placed on the market’, because it had never left the hospital’s medical sphere. The European Court very clearly separated on the one hand the provision of the medical service as such and on the other hand the placing on the market of the (defective) product, which was subsequently used in the provision of the medical service. Only the latter fact pattern and its consequences (placing on the market of a defective product that subsequently harms an individual) is regulated under the product liability directive. The liability for the provision of the service, and also the question whether the use of a defective product in the provision of medical services is negligent or even subject to no fault liability, falls outside the scope of the product liability directive and is still within the member states’ competence.
As a result, it will depend on the member state concerned what the courses of action of the patient are. The patient can sue the manufacturer of the defective medical device for product liability under the EU product liability directive’s regime, and may sue the hospital on the basis of national law governing the provision of the service, if and to the extent that is possible. Since that latter situation is not harmonised, this leads to the situation that patients in different EU member states will have varying recourse against providers of medical services on varying legal bases. The AG addresses this point explicitly as the Commission had pointed out that the applicability of the contested French no-fault liability for hospitals’ use of defective products was the only recourse for the patient concerned in this case, because since the injury occurred during surgery carried out on 3 October 2000, the injured person’s action against the ‘producer’ of the defective mattress, within the meaning of the directive, would be time-barred (10-year limitation period). I mention this specifically because the European Court mentions is very explicitly in its press release so it must attach importance to this and want to alert external parties to this fact. It may even want to send a signal that harmonisation in this area would be a good idea. Taking into account the EU’s plans to promote cross-border provision of medical care (e.g. through the harmonisation of medical devices reimbursement and the Cross Border Patient Rights Directive), there may be terms to harmonise the liability for the provision of medical services as well, if a functioning internal market for medical services is to be created. Indeed, these were the very considerations that form the cornerstone of the product liability directive (see recital 1 of that directive). The question of course will be if this is politically feasible.