Product liability and the CPA: failure to consider product risks and benefits is all risk and no benefit

On 3 July 2020, Lambert J handed down judgment in the long standing Seroxat group litigation, Bailey and others v GlaxoSmithKline (GSK).

This judgment has reinforced the landmark decisions of Wilkes v DePuy International Limited [2016] and Gee & Others v DePuy [2018] which stand as seminal cases on the legal approach to defect in product liability claims brought under the Consumer Protection Act 1987 (CPA). Parties, or potential parties, should therefore take heed. An allegation that a product is defective must be considered in the round. A claim that one characteristic renders a product defective, without consideration of how that product is used and performs in the real world, is now unlikely to succeed in most cases. This is particularly relevant to cases involving medical devices and pharmaceuticals but the principle applies across the spectrum of product liability claims. 

Background

The Seroxat group litigation concerned a group of widely used selective serotonin re-uptake inhibitor prescription medicines (SSRI), a form of anti-depressant, manufactured by GSK (branded as “Seroxat”).

The claimants alleged that Seroxat was defective within the meaning of the CPA because of its alleged capacity to cause adverse effects when a patient discontinued its use, which were said to be worse than other comparator SSRIs. This allegation became known as the “worst in class” argument. There had been numerous opportunities for the claimants to widen the scope of their pleaded case to also encompass the relative benefits of Seroxat. Nevertheless, the claimants expressly disavowed any reliance on relative benefits and did not expand on their pleaded case before trial.

The trial

Lambert J ruled that:

• The claimants’ case was limited to the narrow allegations made, that Seroxat was “worst in class” for its ‘discontinuation symptoms’ compared to other comparator SSRIs.
• The allegations of defect could not be extended to the relative risks and benefits, or relative lack of benefits, of Seroxat and its comparators more generally. It was noted that significant additional evidence would have been required to address a case brought on this wider basis.

The trial was adjourned, as the claimants appealed the Judge’s ruling on this issue.

On 8 November 2019 the Court of Appeal handed down its judgment, unanimously dismissing the claimants’ appeal, and upholding the ruling of Lambert J. Notably, it approved the approach taken in Wilkes, that a holistic enquiry is required when assessing whether a product is defective under the CPA. However, it was too late for the claimants to widen their case by advancing a risk/benefit analysis when this had never featured previously.

In December 2019, GSK made an application for the first of seven generic trial issues to be heard as a preliminary issue. The question to be determined was whether it was appropriate, in principle, to assess whether Seroxat was defective by seeking to establish that it was “worst in class” upon discontinuation. In other words, the court was being asked whether defect under the CPA could be established on the narrow basis as pleaded by the claimants.

The claimants submitted to judgment shortly before the trial of this issue, leaving only costs to be determined.

Costs of the action

GSK sought their costs of the action from the claimants, noting that the costs regime applicable when proceedings were commenced meant that the general rule that the ‘loser pays’ applied.

The claimants argued that there should be no order for costs, asserting that not only had the claimants not sought to resolve the question mark over the legal issues in the case, but that GSK had also failed to apply to strike out the case or move for summary judgment prior to December 2019. This meant that neither party had dealt with the case justly or proportionately.

GSK responded that there was no precedent supporting the claimant’s proposed approach, and no reason not to follow the usual rule that ‘costs follow the event’. Had the court accepted this, it would have effectively penalised a defendant for defending a poorly pleaded case against it, and in circumstances where the pleadings and legal issues had been extensively reviewed and case managed during the course of the claim. GSK’s view was that the claimants were seeking “to have their cake and eat it”.

Lambert J agreed and awarded GSK its costs of the action. Of particular interest is that GSK was awarded its costs on the usual, standard, basis to 21 June 2018 but thereafter on an indemnity basis (i.e. a more generous basis to the recipient). The significance of this date is that it represents a date 28 days from the judgment of Andrews J in Gee which, as referred to above, clarified how the test to establish defect under the CPA should be interpreted, and highlighted the need for a holistic approach to defect. Lambert J stated that, having digested the Gee judgment, it should have been clear to the claimants that their case “was, quite simply, unarguable” and that for them to continue to litigate the case thereafter was “unreasonable to a high degree”. Their conduct was therefore found to be ‘out of the norm’, meaning an order for indemnity costs from 21 June 2018 was appropriate.  

The court ordered a payment on account of costs in the sum of £4.5m.

Comment

When considering the implications of this decision, it is helpful to bear in mind the test for establishing defect under the CPA. A product is defective if its safety is not such as persons generally are entitled to expect. In making this assessment, all the circumstances shall be taken into account.

The cases of Wilkes and Gee, relied on by the court in Bailey as the leading authorities in relation to the approach to defect under the CPA, established the following principles of interest here:

• “All the circumstances” must mean “all relevant circumstances”. These will vary depending upon the particular facts of the case, as will the weight to be given to them.
• Parties cannot stifle the court’s consideration of the circumstances, either by restricting the issues under consideration only to the risks posed by a product or to those matters that relate only to safety. The court must have the option to take into account such other risks and benefits as may be relevant. The court must be allowed to take a flexible and holistic approach to its assessment of the level of safety of a product in each case.
• Safety is inherently and necessarily a relative concept, in that no product can be absolutely safe, particularly a medicinal product, and there can be no sensible expectation that a product is risk free.

In adopting and enforcing these principles, Lambert J has made it clear that if a claimant fails to bring his case in a manner which allows the court the opportunity, where required, to assess a product’s safety in a holistic manner, the claim will not succeed. In fact, it is now unlikely to make it over the first hurdle.

Kennedys acted for the successful defendants in both Wilkes and Gee. Our commentary on both cases can be found here and here.

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