German Federal Court decision on interpretation of a defect: a further erosion of Boston Scientific

This article was co-authored by Holly Waldren, Trainee Solicitor, London.

The 1985 EU Product Liability Directive (the Directive) sets out a regime of strict liability for defective products applicable to all EU Member States. Interpretation of what constitutes a “defect” remains essential in establishing liability. However, the Directive’s broad terms have been an area for considerable debate.

Article 6 of the Directive focuses on the level of safety a person using a product is generally “entitled to expect, taking all circumstances into account” when assessing defect. This definition is incorporated into s.3 of the UK Consumer Protection Act 1987 (CPA). This means that EU court decisions remain relevant to the UK, despite leaving the European Union.

The German Federal Court decision earlier this year - upholding the 2019 approach of the Berlin Higher Regional Court (the Berlin Court) - should help stifle attempts by claimants to widen the scope of this wording, following the decision of the European Court of Justice (ECJ) in the Boston Scientific Medizintechnik GmbH v AOK Sachsen-Anhalt (Boston Scientific) in March 2015 which allowed a broader interpretation of defect. This recent restriction should benefit product manufacturers and their insurers.

This decision also lends support to the approach taken by the English High Court in the cases of Wilkes v DePuy International Limited [2016] (Wilkes) and Gee & Others v DePuy [2018] (Gee), the leading UK authorities, on the appropriate assessment of defect under the CPA.

Development of the interpretation of defect

The test for assessing a defect in a product was considered in A & Ors v National Blood Authority (No 1) [2001]. It held that patients were entitled to receive blood transfusions without contracting any infection and therefore, as they had contracted Hepatitis C from blood transfusions (in the 1980s), the blood was found to be defective within the meaning of the Directive and CPA. Essentially, the contracting of Hepatitis C was proof of defect in itself.

The 2015 ECJ ruling in Boston Scientific extended the position by deciding that a single product (here implantable cardiac defibrillators) would be classified as defective if it belongs to the same group or forms part of the same production series that has a ‘potential defect’, such that there is no need to prove that the particular product itself is defective.

After Boston Scientific, it was argued by some that a mere ‘potential defect’ would be sufficient to establish a product defect and arguments were made to widen the scope to other non-life preserving medical devices, such as hip prostheses.

The case of Wilkes adopted a more flexible or holistic approach to the test for defect, emphasising that the assessment of the expected level of safety in a metal on metal (MoM) hip prosthesis, would be assessed objectively having considered all relevant (but case dependent) circumstances and the appropriate weight to be given to each.

The Gee judgment (now the leading authority on the interpretation and application of the meaning of “defect” under the CPA) repeated the need for the holistic approach, adopting that taken in Wilkes, and further indicated that the assessment of a user’s ‘expectation’ is to be made at the time a product is introduced to the market.

Berlin Court position confirmed

The Berlin Court claim involved a MoM hip prosthesis, allegedly defective because it suffered excessive wear.

In rejecting the Boston Scientific approach, the court found that ‘the fact that the device belongs to a design that suffers (possibly increased) wear, does not constitute a ‘potential defect’, because wear (to which the user’s body responds naturally) is inherent in all medical implant devices and it is uncertain whether increased wear leads to any greater physical injury.

The court held that a ‘risk-v-benefit’ or ‘utility-risk’ assessment must be undertaken, at the relevant time, namely when bringing the product into circulation. In applying that analysis here, the court found that even an increased risk of inevitable wear is not a defect, when considering ‘risk versus benefit’ in all the circumstances.

Comment

The Berlin Court decision closes off attempts by claimants to exploit the Boston Scientific ruling and include the concept of ‘potential defect’, limiting it to the unique facts of that case.

Although courts may differ in their interpretation of defect, Wilkes, Gee and the Berlin Court decisions have very much set the foundation for an objective “utility-risk” analysis when interpreting the meaning of defect under the Directive.

Accordingly, and despite the UK’s departure from the EU, the spirit of the decisions in Wilkes and Gee is being followed by the European courts, and their continued impact is positive for manufacturers and their insurers in limiting the scope of Boston Scientific. This should provide reassurance that all benefits and risks will be considered in defective product claims and will encourage product innovation with less fear of mass litigation.

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