In the July edition of the Life Sciences Newsletter, we discussed ongoing litigation in Germany and France concerning the liability of Notified Bodies under the Medical Device Directive  following the Poly Implant Prothèse ("PIP”) scandal. This update discusses the most recent development in this saga: the decision of the Court of Appeal of Aix-en-Provence (delivered on 2 July 2015) and its implications.

1. Background

The PIP scandal arose when the French regulatory authorities found that PIP had used industrial grade silicone instead of medical grade silicone to manufacture breast implants, contrary to the product specifications and the approval granted by the Notified Body TÜV Rheinland (TÜV).  This substitution resulted in harm to thousands of women around the world.

PIP went into liquidation in 2010, leaving the victims with no recourse against the company. In some countries, the victims commenced proceedings against TÜV, the Notified Body commissioned by PIP for the purpose of certification of the implants under the Medical Devices Directive. The Medical Devices Directive mandates Notified Bodies like TÜV to grant certificates of conformity allowing manufacturers like PIP to apply the CE-mark that guarantees the compliance of the product with the requirements of the Medical Devices Directive. Depending on the classification of the medical device, the Medical Device Directive may also require Notified Bodies to carry out certain assessments.

As indicated in our July update, TÜV was sued in 2011 by distributors in France.  More than 1,700 patients  joined these proceedings. On 14 November 2013, the Commercial Court of Toulon decided in favour of the claimants and ordered TÜV to make  interim payments pending expert assessment of each individual case. Notably, the Court held that TÜV had committed gross negligence in the course of its duties as a Notified Body. The findings of the Court of Toulon was based on a broad interpretation of the duties of Notified Bodies. According to this Court, Notified Bodies under the Medical Devices Directive had an obligation to undertake unannounced on-site inspections, which TUV had failed to do. Accordingly, TÜV did not comply with its obligations of control, prudence and vigilance.

2. Decision of Aix-en-Provence Court of Appeal

On 2 July 2015, the Aix-en-Provence Court of Appeal reversed the judgment of Toulon Commercial Court.

The Aix-en-Provence Court of Appeal adopted a literal interpretation of the duties of Notified Bodies stating that there is no obligation to undertake unannounced on-site inspections. The facts of the case provided that TÜV had performed its duties diligently and in compliance with the applicable regulations.

The Court of Appeal held that the PIP fraud would not have been detected by a Notified Body that had complied with its legal obligations under the law at the relevant time. The applicable law provided that a Notified Body was under an obligation to examine the technical file as submitted by the medical devices manufacturer, but not to carry out unannounced inspections. No element of PIP's technical file could have lead TUV to suspect that the relevant silicone gel had been replaced by a non-approved gel.

This decision follows another decision of the Paris Civil Court dated 29 September 2014, which had also excluded TÜV's liability.

3. Impact

The decision in France means that the claimants would have to repay the interim compensation they had been awarded and leaves the claimants with limited scope for recourse against TÜV . However, since the PIP scandal, European legislators have tightened the regulation of Notified Bodies by Implementing Regulation (EU) 920/2013 of 24 September 2013. This regulation sets out the criteria for designation and surveillance of Notified Bodies and provides for joint audits, transparency and cooperation between Member States in the regulation of Notified Bodies. Two new EU Regulations  are also set to be implemented, which will introduce more stringent regulation of manufacturers of medical devices and Notified Bodies.

Although more stringent regulation of Notified Bodies has already been implemented and further changes are on the horizon, the decision of the French Courts still leaves the issue of the liability of Notified Bodies somewhat unclear. However, as noted in our July update, there is a preliminary reference from the German Federal Court concerning a similar case brought by a patient who received PIP implants that is pending before CJEU . Notably, the reference seeks to clarify whether it is the purpose and intention of the Medical Device Directive that the Notified Body  has direct and unlimited liability towards the patients concerned in the event of a culpable infringement of an obligation. The reference also seeks to clarify the extent of the Notified Body's obligations.

It is hoped that the eventual ruling of the CJEU will provide certainty for both patients and Notified Bodies across the EU. However, it will be interesting to see whether the CJEU agrees with the restrictive interpretation of the responsibilities of the Notified Bodies as set out by the lower German and the French courts. The CJEU will no doubt be aware of the increased concern for patient safety, the legislative changes that have been implemented since the PIP scandal and the current discussions surrounding the proposed Medical Device Legislation.