Product liability class action hurdles – lessons from recent Canadian and UK decisions

This article was co-authored by Jason Arcuri, Lawyer, Dolden Wallace Folick LLP.

The outcome of two Canadian product class actions in 2020 signal hurdles claimants may face around the globe in 2021 in alleging adverse health effects in mass tort claims involving products for consumption such as medical cannabis, other pharmaceutical products and food.

Canadian class actions

The first action, Organigram Holdings Inc. v Downton [30 April 2020], was in relation to a recall in 2016 of some of Organigram’s medical cannabis products which contained trace amounts of pesticides not approved for use in cannabis. The representative plaintiff who had bought and consumed this medical cannabis alleged adverse health consequences as well as economic losses.

The second action, MacInnis v Bayer Inc. et al. [20 November 2020], involved allegations that a medical implant product designed to be a permanent contraceptive device was associated with “bleeding, bloating and other side effects”. The plaintiff claimed that the device posed a danger to all women who were treated with it, either due to its faulty design or the inadequate training of attending physicians.

Impact of Canadian cases

In Canada, the Organigram and MacInnis decisions are notable because they represent a departure from the trend granting certification to plaintiffs on the basis of having demonstrated a “workable methodology” for proving that a defendant caused the alleged harm to the proposed class.

The role of the expert methodology was set out in the Supreme Court of Canada’s 2013 decision in Pro-Sys Consultants Ltd. v Microsoft Corporation, where the court held that the methodology “must offer a realistic prospect of establishing loss on a class-wide basis” and “cannot be purely theoretical or hypothetical, but must be grounded in the facts of the particular case in question”.

In Organigram, the plaintiff’s expert evidence was criticised as being too “generic” and his proposed methodology was challenged for being unable to determine whether the recalled cannabis product caused the alleged symptoms at issue. In MacInnis, the plaintiff’s expert opinion was challenged on its exclusive reliance on a review of peer-reviewed medical and scientific literature, whereas the defendant’s experts gave evidence based on their extensive experience with the medical implant product.

The Canadian decisions reinforce the necessity of a workable methodology that can establish general causation on a class-wide basis. Moreover, the methodology must be substantiated by credible, fact-based expert evidence. The decisions also reiterate the court’s gate-keeping function at the class certification stage. With increased scrutiny of the methodologies being presented by class plaintiffs, class certification in Canada may be becoming more onerous.

Wider impact

Certification of a common issue is the battleground on which defendants can stifle collective redress if the local certification criteria are narrow and the claims depend on establishing medical causation.

In England and Wales, there are several paths for collective action procedures, or multi-party product liability litigation involving multiple claimants and/or defendants. These include:

• Claims by multiple claimants managed together by the court using its case management powers
• Group litigation orders (GLOs)
• Claims by representative claimants.

A GLO can be made where more than one claimant has a cause of action raising common or related issues of fact or law. Once a GLO is made and relevant issued claims have been entered on a ‘group register’, any judgment on one GLO issue will be binding in relation to all other claims on the group register, unless otherwise ordered by the court. Where convenient to do so, it is possible that one or more lead or test claimants may be selected for a decision on a certain issue(s).

In Município De Mariana & Ors v BHP Group Plc [09.11.20] a High Court Judge in Manchester threw out the largest group litigation in English history involving 200,000 Brazilian claimants seeking £5 billion in damages after a dam failure in 2015. Given the vast numbers of claimants involved and the parallel proceedings in Brazil, the judge said that the task facing the managing judge in England would, “be akin to trying to build a house of cards in a wind tunnel” and ruled the case was an "abuse of the process of the court". Lawyers representing the claimants have vowed to appeal the decision. In our view, the prospects of a successful appeal on the facts of this case are low.

Despite the BHP Group case outcome, group litigation in England and Wales is likely to be on the rise. The Supreme Court decision of Merricks v Mastercard demonstrates that, in the right circumstances, an English court will not stand in the way of a group action. A further factor is the EU Directive on representative actions which has now come into force. This provides the means by which all EU consumers can bring group actions, known as collective redress, in respect of infringements of EU law.

Whilst this EU Directive will not be implemented in England and Wales further to Brexit, it may put pressure on the English courts to keep group actions on the table whenever possible, to ensure they do not “lose” claims to other EU jurisdictions. Although the English courts will certainly expect parties to meet any relevant thresholds before granting permission for a group action, the culture of group actions generally in England and Wales is likely to be here to stay.

Comment

In light of the collective redress developments in 2020 in both Canada and in England and Wales, we envisage that the impetus for mass tort claims will continue globally in 2021, particularly in the wake of the COVID-19 pandemic recovery.

It, however, appears that those seeking to advance such actions will need to be better prepared to substantiate their cases at an earlier stage, particularly in relation to their underlying expert evidence. Conversely, there may be even greater incentive for defence counsel to challenge that evidence early on.

In order to mitigate any potential liabilities, manufacturers of products for consumption and their insurers would be wise to focus on increasing the optimal safety of their products by:

• Employing more due diligence and quality control over their products both pre- and post-market
• Having a proactive risk mitigation strategy that can be implemented after the discovery of a risk
• Reviewing their product recall policies and procedures.

Related items:

• Strength in numbers: new rules for collective action in the EU
• Product recall: practical considerations for global manufacturers
• Has the Supreme Court opened the floodgates for future group actions?
• Medical cannabis and potential product liability implications