Federal Court of Justice (also) rules on product liability for medical devices exhibiting an increased risk of failure

The European Court of Justice (ECJ) ruled on 5 March 2015 that even a mere potential defect in a medical device (in this case pacemakers and implantable cardioverter defibrillators) could result in all devices of the same model being classified as defective. The ECJ proceedings were based on requests for a preliminary ruling by the German Federal Court of Justice (Bundesgerichtshof – BGH). The German court has now also passed judgment.

Background

The decisions handed down by the Federal Court of Justice on 9 June 2015 (case nos VI ZR 284/12 and VI ZR 327/12) mark what is for the time being the conclusion of two proceedings regarding merely potentially defective medical devices, i.e. situations where an increased risk of failure has been established in connection with a product group or product series without any malfunction having been proven in the individual device. Since the applicable law, the German Product Liability Act, was introduced in implementation of the EU Product Liability Directive (85/374/EEC), the Federal Court of Justice had referred two questions to the ECJ regarding the interpretation of this Directive. Firstly, the Federal Court had asked whether a product is already defective in the sense of Article 6 of the Directive if it is a medical device implanted in the human body and devices in the same product group exhibit a notably increased risk of failure or if a malfunction has occurred in a significant number of devices in the same series (without a defect being detected in the device actually implanted). Secondly, it asked whether the costs for operations replacing such medical devices constitute damage caused by personal injury for the purposes of Article 9 of the Directive.

In its judgment of 5 March 2015 (cases C-503/13 and C-504/13), the ECJ answered both questions referred to it in the affirmative. On the issue of defects in the relevant medical devices, the Court explained in particular that the degree of safety that could be expected primarily arose from the intended purpose, the objective characteristics and properties of the product and the specific requirements of the group of users for whom it is intended. It reasoned that in view of this the safety standards that patients were entitled to expect were particularly high – especially because the severe potential damage entailed a potential lack of safety for the patient concerned that could not be remedied by the Product Liability Directive taking into account its purpose and intention. The ECJ also interpreted the concept of damage in the Directive broadly, but without examining the aspect of causality of the damage in detail. Thus the costs associated with replacing the defective device are in particular also eligible for compensation if such an operation is necessary to remove the defect of the product concerned. According to the ECJ, the court referring the question has to determine whether or not this was necessary.

Decisions of the Federal Court of Justice

In its judgments of 9 June 2015, the Federal Court of Justice has now put the principles set out by the ECJ into practice. The Court emphasised several times that it was bound by the findings in the ECJ’s interpretation and refrained from further defining the concepts of defect and damage under product liability law. Notably, it did not put the application of product liability law in the context of general tort-related manufacturer’s liability.

Nevertheless, it is certainly possible to draw conclusions in relation to defectiveness from the factual basis underlying the judgments. A probability of defects occurring in a pacemaker that was 17 to 20 times higher than normal and an established failure rate of four out of 46,000 defibrillator devices was, in the ECJ’s opinion, sufficient to assume that the devices were defective. Thus, although the requirements may be seen as rather low, even after the judgments of the Federal Court of Justice it is still unclear whether a single defect within a product group or series is sufficient to give rise to potential defectiveness of the whole group or series. The higher the potential damage is for the patient using the device, the greater the assumption may/will have to be that it is defective.

The Federal Court also refrained from commenting any further on whether operation expenses were eligible for compensation. Like the ECJ, it clearly assumed that in the case of the pacemaker an operation would be necessary to explant the device and implant a different one. In case of the defibrillator, however, the Federal Court of Justice referred the issue of assessing the need to explant back to the appeal court since it had not yet reached any satisfactory findings.

Conclusion and outlook

The ECJ’s interpretation of the Product Liability Directive in its preliminary ruling may well have contained statements with general significance that could claim applicability beyond the boundaries of product liability for medical devices. Yet the rather brief nature of the comments by the Federal Court of Justice, which fail to elaborate on the ECJ’s statements, would infer that they relate to individual decisions on implantable medical devices. The fact that the questions originally submitted to the ECJ were limited to implanted devices is also strong evidence for this.

Thus manufacturers undoubtedly have an increased duty to monitor their products. However, neither of these two highest courts clarify what specific requirements are to be placed on the risk of failure in order to give rise to the defectiveness of an entire product group. This will probably depend on an assessment in each individual case, taking into account the potential damage. This is another reason why it is difficult to generalise the judgments of the Federal Court of Justice and apply them to other medical devices. Thus further references to the ECJ are to be expected so that it can continue the necessary process of defining the concept of defects under EU law. Until then, product liability risks will still have to be assessed on a case-by-case basis.

Further reading: ECJ confirms product defects due to increased risk of failure of medical devices