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Strict Product Liability
542
and specialisation. But they are less sure whether the no doubt more modest Whitley council award for ancillary workers will be fully funded, which would leave the social services committee short of its aspirations. The report suggests that Government initiatives for specific priorities in the health service are so many and so wide-ranging that the word "priority" has been devalued. "We are seriously concerned by the apparent absence of any sort of relationship between ’priorities’ set by the Government and the system of budgetary planning in the NHS", the MPs say. Health circulars do not tell authorities how much priority services ought to cost or what proportion of their budget they ought to allocate. It is this cash problem which forms the core of the report. In their evidence to the committee, DHSS officials cast doubt on the authenticity of the 2% real-term growth target for NHS spending, which, it had been believed, was Government policy. It is now unclear what the official figure is, or how Ministers know that their policy objectives are being met. The committee sticks with 2% as the best available estimate of the requirement for growth. Its next
Medicine and the Law Strict Product Liability ON March 1, part I of the Consumer Protection Act 1987, which deals with liability for damage caused by defective products, came into force. The Act was passed in response to a European Commission directive intended to apply strict liability for defects in consumer products. However, the "development risks defence" substantially weakens that strictness. It was left to member states to decide whether to include this defence-and in Britain the business lobby successfully argued that without that protection new products would not be developed because of fear of litigation. However, France, Belgium, and Luxembourg already have strict product liability and do not permit a development risks defence; the Netherlands and Ireland will not include the defence either; and nor will West Germany, which has had strict liability for pharmaceutical products since 1978. The impact on drug manufacturers, importers, suppliers, doctors, and pharmacists will be considerable. In particular, doctors and pharmacists will need to keep careful records of the product and its source for at least ten years (the limitation period) if they are to deflect liability from themselves, and everybody liable under the Act should also be aware of any subsequent revelation of defects or contraindications, or recommended amendments to dose levels or methods of use. Are blood and blood products included? In Sweden, haemophiliacs and patients infected with HIV from contaminated blood or blood products have been compensated under the patient insurance and pharmaceutical insurance schemes.1 In the USA legislation has been passed to classify blood as a "service" rather than a product, but the Swedish classification seems the more logical. Under the Swedish insurance schemes the state of the art defence does not exist. Products will also include prostheses, materials used in surgery or other treatments, and intrauterine devices. Liability will extend to the person who manufactured the product (which, for the purposes of the Act, includes raw materials), any person who puts his name or trade mark on the product as the manufacturer, and any person who imports the product. Because liability is not restricted to the ultimate supplier, a chain of liability may be created which will increase the number of potential defendants to any claim. Will drugs or products handed out free by a supplier or manufacturer to promote business or for a clinical trial fall within the Act? In my view they could do so because trials of
was a refusal by DHSS officials to give any information about their estimates of inflation relevant to the NHS which were taken into account when preparing their expenditure bid to the Treasury. It was therefore impossible to compare their forecasts with the outcome to derive what shortfall has occurred over recent years. The committee’s conclusion that between 1981-82 and 1987-88 there has been a cumulative underfunding of 1896 million was from work by the King’s Fund Institute, based on DHSS data on the service pressures of demographic trends. What must be worrying for Ministers is that this is only the first report from a committee that now intends to examine all the arguments about NHS reform and to produce a report before the Cabinet reaches its conclusions. Mrs Thatcher will not be amused if the policy initiative she desires is comprehensively rubbished by these MPs before she has even been able to launch it. JOHN CARVEL
problem
1. Social Services
Committee, First report. Resourcing the National Health Service. Short term issues. House of Commons Paper 264-I. HM Stationery Office £4.20, 1988.
are done with the aim of increasing the manufacturer’s trade and range of marketable products-the costs of funding trials are certainly deducted from the manufacturer’s tax liability. In any event, the manufacturer or supplier may rely on the development risks defence. However, if a patient were injured by a drug during a trial and the trial data revealed the existence of the risk which had materialised, the defendants could find themselves in difficulties. The Act states that a product is defective if its safety is not such as "persons generally are entitled to expect". This will include the manner in which and purposes for which the product has been marketed, its presentation, and any instructions or warnings. In addition the fact that a later edition of the products is "improved" will not infer that the earlier one was in any way defective. Advertisements as well as labelling and advisory leaflets would appear to be covered. Manufacturers of drugs are increasingly encouraged to and indeed do include patient information leaflets with their products. If these are removed and the product is misused as a consequence, the supplier who removed the leaflet may find himself liable. The Act actually puts the onus on the manufacturer to consider the misuse to which the product may be put, although the manufacturer will be able to claim that the plaintiff was guilty of contributory negligence in certain circumstances. The Act shifts the onus on to the defendant to excuse himself from liability. There are several defences available including: injury was caused by compliance with legislation, the defendant did not in fact supply the product, or the defect did not exist in the product at the relevant time. However, the most important defence is that "the state of scientific and technical knowledge at the relevant time was not such that a producer of products of the same description as the product in question might be expected to have discovered the defect if it had existed in his products while they were under his control". This defence considerably limits the Act’s protection to consumers. If no pharmaceutical or patient insurance scheme is introduced, the retention of the development risks defence means that future victims of a thalidomide-type disaster could be left without a
products
remedy. Damage under the Act includes death or personal injury. Personal injury includes any disease and any other impairment of a person’s physical or mental condition, which would seem to bring damages for nervous shock within the Act. Small claims for less than jC275 are excluded and the Act is not restrospective. DIANA BRAHAMS, Barrister-at-Law 1 Brahams D. The Swedish medical insurance schemes: The way ahead for the United
Kingdom? Lancet 1988,
i: 43-47.
and specialisation. But they are less sure whether the no doubt more modest Whitley council award for ancillary workers will be fully funded, which would leave the social services committee short of its aspirations. The report suggests that Government initiatives for specific priorities in the health service are so many and so wide-ranging that the word "priority" has been devalued. "We are seriously concerned by the apparent absence of any sort of relationship between ’priorities’ set by the Government and the system of budgetary planning in the NHS", the MPs say. Health circulars do not tell authorities how much priority services ought to cost or what proportion of their budget they ought to allocate. It is this cash problem which forms the core of the report. In their evidence to the committee, DHSS officials cast doubt on the authenticity of the 2% real-term growth target for NHS spending, which, it had been believed, was Government policy. It is now unclear what the official figure is, or how Ministers know that their policy objectives are being met. The committee sticks with 2% as the best available estimate of the requirement for growth. Its next
Medicine and the Law Strict Product Liability ON March 1, part I of the Consumer Protection Act 1987, which deals with liability for damage caused by defective products, came into force. The Act was passed in response to a European Commission directive intended to apply strict liability for defects in consumer products. However, the "development risks defence" substantially weakens that strictness. It was left to member states to decide whether to include this defence-and in Britain the business lobby successfully argued that without that protection new products would not be developed because of fear of litigation. However, France, Belgium, and Luxembourg already have strict product liability and do not permit a development risks defence; the Netherlands and Ireland will not include the defence either; and nor will West Germany, which has had strict liability for pharmaceutical products since 1978. The impact on drug manufacturers, importers, suppliers, doctors, and pharmacists will be considerable. In particular, doctors and pharmacists will need to keep careful records of the product and its source for at least ten years (the limitation period) if they are to deflect liability from themselves, and everybody liable under the Act should also be aware of any subsequent revelation of defects or contraindications, or recommended amendments to dose levels or methods of use. Are blood and blood products included? In Sweden, haemophiliacs and patients infected with HIV from contaminated blood or blood products have been compensated under the patient insurance and pharmaceutical insurance schemes.1 In the USA legislation has been passed to classify blood as a "service" rather than a product, but the Swedish classification seems the more logical. Under the Swedish insurance schemes the state of the art defence does not exist. Products will also include prostheses, materials used in surgery or other treatments, and intrauterine devices. Liability will extend to the person who manufactured the product (which, for the purposes of the Act, includes raw materials), any person who puts his name or trade mark on the product as the manufacturer, and any person who imports the product. Because liability is not restricted to the ultimate supplier, a chain of liability may be created which will increase the number of potential defendants to any claim. Will drugs or products handed out free by a supplier or manufacturer to promote business or for a clinical trial fall within the Act? In my view they could do so because trials of
was a refusal by DHSS officials to give any information about their estimates of inflation relevant to the NHS which were taken into account when preparing their expenditure bid to the Treasury. It was therefore impossible to compare their forecasts with the outcome to derive what shortfall has occurred over recent years. The committee’s conclusion that between 1981-82 and 1987-88 there has been a cumulative underfunding of 1896 million was from work by the King’s Fund Institute, based on DHSS data on the service pressures of demographic trends. What must be worrying for Ministers is that this is only the first report from a committee that now intends to examine all the arguments about NHS reform and to produce a report before the Cabinet reaches its conclusions. Mrs Thatcher will not be amused if the policy initiative she desires is comprehensively rubbished by these MPs before she has even been able to launch it. JOHN CARVEL
problem
1. Social Services
Committee, First report. Resourcing the National Health Service. Short term issues. House of Commons Paper 264-I. HM Stationery Office £4.20, 1988.
are done with the aim of increasing the manufacturer’s trade and range of marketable products-the costs of funding trials are certainly deducted from the manufacturer’s tax liability. In any event, the manufacturer or supplier may rely on the development risks defence. However, if a patient were injured by a drug during a trial and the trial data revealed the existence of the risk which had materialised, the defendants could find themselves in difficulties. The Act states that a product is defective if its safety is not such as "persons generally are entitled to expect". This will include the manner in which and purposes for which the product has been marketed, its presentation, and any instructions or warnings. In addition the fact that a later edition of the products is "improved" will not infer that the earlier one was in any way defective. Advertisements as well as labelling and advisory leaflets would appear to be covered. Manufacturers of drugs are increasingly encouraged to and indeed do include patient information leaflets with their products. If these are removed and the product is misused as a consequence, the supplier who removed the leaflet may find himself liable. The Act actually puts the onus on the manufacturer to consider the misuse to which the product may be put, although the manufacturer will be able to claim that the plaintiff was guilty of contributory negligence in certain circumstances. The Act shifts the onus on to the defendant to excuse himself from liability. There are several defences available including: injury was caused by compliance with legislation, the defendant did not in fact supply the product, or the defect did not exist in the product at the relevant time. However, the most important defence is that "the state of scientific and technical knowledge at the relevant time was not such that a producer of products of the same description as the product in question might be expected to have discovered the defect if it had existed in his products while they were under his control". This defence considerably limits the Act’s protection to consumers. If no pharmaceutical or patient insurance scheme is introduced, the retention of the development risks defence means that future victims of a thalidomide-type disaster could be left without a
products
remedy. Damage under the Act includes death or personal injury. Personal injury includes any disease and any other impairment of a person’s physical or mental condition, which would seem to bring damages for nervous shock within the Act. Small claims for less than jC275 are excluded and the Act is not restrospective. DIANA BRAHAMS, Barrister-at-Law 1 Brahams D. The Swedish medical insurance schemes: The way ahead for the United
Kingdom? Lancet 1988,
i: 43-47.