Health Check | Episode 3 – Navigating liability laws for healthcare products
Hello, and welcome to OC Health Check, the podcast that takes the temperature on regulatory developments affecting the life sciences and health care sector in The UK and offers a prescription to these challenges. I'm Anna Lundy.
Speaker 2:And I'm Peter O'Clark. We're both regulatory lawyers from Osborne and Clark. So today, we're looking at some new product liability laws that have come into effect in The EU and trying to look forward to seeing what what would be happening in The UK, particularly for the life sciences sector. Liability law is a real topic for this sector because ultimately, any life sciences products, whether it's a medical device or a pharmaceutical product, has some sort of effect on the human body. And the question about whether a legitimate side effect becomes a liability problem because the product is defective is a very hot topic.
Speaker 2:It's been a topic the industry has had to grapple with for decades now. And because new law is now in the statute book for the EU and change is likely afoot in The UK, we thought this would be a great time to examine these issues. So Anna, you were looking at the EU side of things?
Speaker 1:Yeah. Well, there was a major development towards the end of last year with the new EU product liability directive that was published. Member States have until the 12/09/2026 to transpose the new directive into national law. And the reason I say this is a major development is that it is the biggest reform to the civil liability framework for defective products since the introduction of the very first product liability directive back in 1985. And this reflects the dramatic developments of technology and supply chains over the last four decades.
Speaker 1:So what this means is that products placed on the EU market or put into service from the 12/09/2026 will be subject to the new directive, and those products that are already on the market or put into service before the 12/09/2026 will be subject to the former product liability directive.
Speaker 2:So that's the position in the EU. And Anna, mentioned the 1985 directive as the previous law before the new EU law came into effect. And some listeners may be a bit surprised to know that the liability laws in The UK, the 1987 Consumer Protection Act, is actually still based on that 1985 directive. So some people would argue that change is very overdue in The UK. What is the position in The UK?
Speaker 1:Well, you may be pleased to know that there is a reform of product liability laws on the agenda here in The UK as well. A 2023 government consultation recognized that reform of The UK's product liability framework is long overdue. And in September 2024, the UK government introduced the bit of a mouthful product regulation and metrology bill, which gives the UK government powers to recognize EU product safety rules and the indications from the 2023 consultation and the government briefing concerning the bill are that reform of UK liability laws will be driven by the same developments in the consumer landscape that led to the new EU directive and that updated UK law may well be designed to align with the new EU regime. So, Pete, if we're looking at this from an OC Health Check thermometer point of view, Is this looking critical for manufacturers in life sciences and healthcare?
Speaker 2:I think it probably is. And a good reason to say that, and a good sort of angle to come in at this from, is that liability laws and reform and case law over the last few decades, whether it's the EU or UK, have actually largely been driven by what's been happening in the life sciences sector. So looking over the last few years, you see quite a few examples of products that have gone to the market and been caught up in a lot of controversy, whether it's breast implants, orthopedic products, muscle and muscle hips, or more recently talc products, or Zantac or pelvic mesh, whatever it may be. These have been headline grabbing incidents, led to large scale pieces of litigation. And they've really driven the policy response both in The EU and UK, a view really that the law until now has not really been fit for purpose.
Speaker 2:And it's been pretty difficult for consumers or patients to seek compensation. So whilst the laws that you've been talking about, Anna, coming into the EU and UK apply to any products put on the market, the real driver for reform has really been because of a history of problems associated with some life sciences products.
Speaker 1:And is there anything specific to The UK, which means that these liability case studies have had a particularly big effect on what the government might do about legislating in this area?
Speaker 2:Yeah, I think it has. I mean, for governments of both colors, Conservative and now Labour, it's been a very live issue. So for example, the last Conservative government commissioned a report by Baroness Kumbelich that reported in 2020. And that looked into failings within the NHS. And a large part of that was real inability for patients who've been affected by products that were allegedly defective to get compensation.
Speaker 2:And one of the recommendations from that review is that in the future, future laws in The UK need to be frankly, from a legal perspective, more proclaimant. It needs to be easier for people to see manufacturers. So that report landed in 2020. The government responded to it. And the feeling that the system has got to balance innovation and safety in a more sophisticated way has really fed through to what's happening in terms of regulatory legislative reform.
Speaker 2:So for example, we now have in The UK a bit of post Brexit legislation, the Medicines and Medical Devices Act 2021. And as that was going through parliament, that was amended so that the Secretary of State has an obligation to take into account patient safety as much as the need for innovation when new products are brought onto the market. So I think for any manufacturer who's who's bringing products to the market in The UK or The EU, there's there's a huge amount now to to be on top of. For example, the the burden of proof in complicated products is now switched over. So previously, a claimant had to prove that products didn't meet the safety standard.
Speaker 2:Now in the case of complex products in The EU from 2026 onwards, a claimant can put a manufacturer to prove that their product is safe. So right from the outset, manufacturers would probably have to do a lot more to document how their product has gone through clinical studies, how it's been tested for safety, how it's been put onto the market and how they've tracked it when it's been on the market for a while to prove that it's still a safe product and doesn't need to be recalled.
Speaker 1:Very interesting. Are you able to give an example of how a manufacturer placing a product on the market in the future may have to deal with the new directive and obviously, if The UK also adopts a similar system.
Speaker 2:Yeah, can you imagine an orthopaedic product that has gone through clinical studies, it's been put on the market for a particular demographic. So if you take, say, a hip implant, traditionally hip implants were were really just used to help older people get out of bed, get to the shops, that's what a hip implant does. Whereas over the last few years, there's been a lot more innovation. So you've got much more, if you like, bespoke devices or devices for particular demographics. So you've now got implants that enable people to go back to playing sport, playing tennis, playing golf, whatever it might be.
Speaker 2:So you've got new demographics. It's great for society because you've got more choice of people and more people that can be helped. But these products are new, they probably don't have as much of a track record. So now, under the new obligations that come with the directive and change if it goes this way in The UK, the manufacturers got to be on top of the documentation that goes with the product, so they can prove in the event of any investigation or litigation, how that product meets safety standards, how it's designed, how it's being put on the market with proper warnings, instructions for surgeons and the processes they've now got in place to make sure they're carrying out their vigilance obligations properly. So the event of an issue, they can recall it quickly or issue new guidelines to manufacturers.
Speaker 2:So this sort of issue of disclosability, proving how your product works, being on the front foot, being prepared for litigation, I think is a big change compared to how things were under the old law. And something that manufacturers putting products on the market in The EU, potentially The UK are just gonna have to get used to.
Speaker 1:So how does that all fit with the post market surveillance regulations and the the pre market regulations that are due to come in?
Speaker 2:Yeah. So it's all very specific to the life sciences sector. But it's a real example of you can't just take liability laws in isolation. So when you're either putting your products in the market and trying to mitigate your liability risk or, you know, worst case, having to respond to litigation where claimants have brought litigation concerning your products, it's not just about the liability laws, it's not just about the new directive, it's not just about the Consumer Protection Act. A large part of the manufacturers' defense, if they're defending a product, is to show how actually a product is compliant with the regulations affecting their sector.
Speaker 2:So in this case, yeah, it's gonna probably create more burdens, more red tape, more hurdles for manufacturers to get a product onto the market. You've got to comply with more regulations, whether it's post market surveillance regs or the pre market regs that we'll see applying to medical devices. But once you're compliant with these regulations, it provides you with golden argument in a litigation context. You can say to the court, look, these are highly regulated products. The reason regulations exist is because it's all to do with patient safety.
Speaker 2:I've complied with these regulations, I've met a really high standard of safety in order to put my products on the market. So by proving I'm compliant with these really onerous obligations to do with patient safety, I can therefore demonstrate my product is safe. And the claimant's argument that the product is defective doesn't meet the safety standard can be blown out of the water because you have good evidence. But it goes back to that point about when you're preparing your product, putting on the market, just making sure you're collecting all that really good data to show how you've complied with the regulations and your product's safe because you might need it in your back pocket if there's litigation down the line. So now you you mentioned this is a a directive that's gotta be implemented by 2026, not a regulation.
Speaker 2:What's the impact of that for this sector?
Speaker 1:Yeah. Well, that's a really good point. It is a directive and not a regulation. So there will be divergence across the member states. And a real feature of litigation in this area is that if there is an allegation, then it could involve thousands or even millions of people who have, for example, taken a medication or been implanted with a device.
Speaker 1:So it means you could be facing litigation across lots of different member states who all have different regimes, around disclosure rules and limitation periods and their legal procedure. So adopting a unified approach to managing litigation is going to be really critical here.
Speaker 2:Yeah. I think you're right. You have to be pretty strategic, and we've had matters where you've got a dashboard almost with litigation going on in different places, you've and to be very careful about managing it. For example, what you don't want is a a judgment from a rogue court in a jurisdiction that's going to pollute the effects you're trying to have elsewhere. So having a sort of central control over the whole strategy with litigation like this arises across different EU member states and The UK is, as you say, really important.
Speaker 1:Yeah. Exactly.
Speaker 2:Yeah. So all in all, it's it's pretty critical reading on the OC HealthCheck thermometer.
Speaker 1:Absolutely. And to keep updated on all the key developments, do check out our microsite.