Ruling has major impact on product liability insurers and UK/EU manufacturers

Allen & ors v DePuy International Ltd [2014]

A landmark decision in the High Court this week (Mr Justice Stewart, judgement 18.03.04) for all those engaged in product liability with an international perspective, in which Kennedys represented the successful defendant manufacturer.

Background

  • A sample group of ten claimants (Cs) from countries outside the EU brought claims against DePuy International Limited (D) in the English High Court for alleged personal injuries arising out of the insertion of prosthetic hip implants manufactured in England.
  • Cs had received their prostheses in New Zealand, Australia and South Africa.
  • Each C alleged that English law should apply to their claims and that they should be entitled to rely upon the Consumer Protection Act 1987.
  • D asserted that the “local law” applied to each C, either being the country in which each claimant first suffered his/her injury, or the country in which the claimant received his/her implant – none of which were England.
  • The question of when the “event” giving rise to injury occurred in each case.


Preliminary issues

The preliminary issues before the court were:

  • Whether the event leading to damage to each C arose before or after 11 January 2009 (thus falling under Rome II, Regulation Art 31).
  • If the event occurred before 11 January 2009, what factors should be taken into account when determining the applicable law under the Private International Law (Miscellaneous Provisions) Act 1995? (PILA)?
  • Accordingly, what was the law to be applied to each individual claim?
  • If English law applied to any of them, could Cs pursue a claim under the EU Product Liability Directive (PLD), enacted in the UK as the Consumer Protection Act 1987 (CPA)?


ROME II

The court held that the provisions of Rome II did not apply here, as all claimants had received their prostheses before January 2009 The Judge found that the relevant date was the despatch of the product from D’s warehouse, but if that was incorrect it was the date of original implant operation. Accordingly PILA governed the determination of applicable law.

PILA

Under PILA the following points applied:

  • The general rule under section 11 is that the applicable law is that of the country where the injury was sustained (which here was not necessarily the same country as that of the implant operation, as “injury” could occur at a later date).
  • D must prove the applicability of foreign law in each case.
  • The general rule can be displaced in exceptional cases under S.12(2) of PILA.
  • The balance of factors prescribed under S.12(2) must weigh in favour of the other country.


The court reviewed the connecting factors, including:

  • Where the hip implant operation(s) took place, in each case outside England, this included New Zealand and South African for nine out of the ten claimants, with one C having his implant in Australia.
  • C’s injuries first occurred outside of England – being in New Zealand, South Africa and Fiji,
  • C’s revision operation(s) and other treatment took place outside England, in either New Zealand or South Africa.
  • The objective expectation of the parties at the time of implantation and when revision operations took place was that the local law applied not English law.

The judge held, as contended by the defendant, that the relevant law applicable was that of New Zealand in four claims and South Africa in six claims, notwithstanding that one of the claimants received his hip implant in Australia and another was found to have first suffered his injury in Fiji (the s12(2) exception applying to the latter who had sufficient connections to New Zealand).

CPA

If English law had been applicable, do the Product Liability Directive and CPA extend to injuries caused outside the European Economic Area (EEA)?

The court reviewed the background to the CPA and agreed with the detailed submissions of the defendant’s leading counsel, Charles Dougherty QC, that the CPA applied to injuries or damage suffered by consumers when in the UK and the PLD for consumers in the EEA, with the purpose of harmonising the laws of the EEA redress in product liability claims. 

It did not therefore cover claims for injury/damage occurring outside the EEA. In particular, Mr Justice Stewart held that the PLD/CPA were not intended to harmonise redress worldwide in respect of products manufactured in the EEA.

Comment

This is an important decision, confirming:

  • Manufacturers within the EEA are not liable to consumers suffering injuries outside the EEA under the PLD (nor UK manufacturers under CPA for injuries suffered outside the UK).
  • Accordingly in respect of individuals who suffer injury outside of the EU, due to a product manufactured in the UK, whilst they have the right in principle to sue the manufacturer in its home country, even if a court was to decide that English law should apply (as an exception to the general position in PILA or Rome II), there is no right to sue under the CPA.
  • This appears to be the first time the courts have been asked to determine this issue and it has far reaching implications for non-EU claimants, who suffered their injuries abroad but attempt to sue a UK manufacturer in England or Wales.
  • Under the PILA and Rome II the applicable law generally is that of the country where the claimant sustained the injury.
  • For Rome II, as currently held, the date of the event giving rise to the damage is when the product is released by the manufacturer, or possibly when it is supplied to the claimant.
  • For those claimants where South African law applies in this action, they will have to prove negligence, as product liability law relating to injury or damage to consumers in SA only changed with effect from 2010 so as to provide protection akin to the PLD/CPA.
  • Where New Zealand law applies the next issue is: do the claimants have any right to sue at all, where that law gives no right to do so in New Zealand, by reason of the local Accident Compensation Scheme. This may now have to be determined in a separate preliminary issue.


Trevor Davies, Andrew Hunn and Waleed Bakali of Kennedys represented DePuy International Limited. Counsel were Charles Dougherty QC and Alex Antelme.