A ruling of the European Court of Justice (ECJ) in March 2015 has potentially significant consequences for manufacturers and importers of medical devices in Australia.
The ECJ's ruling is relevant to Australia because Australia's key defective products law – Part 3.5 of the Australian Consumer Law (ACL) – is based on the European Product Liability Directive. The ECJ's ruling dealt with a central aspect of the European Product Liability Directive.
Both the European Product Liability Directive and Part 3.5 of the ACL provide that manufacturers (and, in Australia, importers if the manufacturer does not have a place of business in Australia) are liable to compensate persons who suffer injury caused by defective products. In Australia, a product is defective if it is not as safe as persons generally are entitled to expect, and the test is similar under the European Product Liability Directive. The central ruling by the ECJ was that where one product is identified as being potentially defective, other products in the same product group or series may also be considered defective. This is novel because to date it has been necessary to prove that the particular unit in question, used by the person who suffered the injury, was defective.
The ECJ's ruling concerned implantable medical devices – specifically, pacemakers and defibrillators. The status of users of these products was an important factor in the ECJ's finding that the products did not provide the safety which a person is entitled to expect. The ECJ said that the "particularly vulnerable situation of patients" using the devices and the "function" of the devices would entitle patients to expect that their safety requirements would be "particularly high" for those devices.
It is not clear yet how great an impact the ECJ's decision will have in Australia. The decision is not binding on Australian courts, but it may be considered persuasive as it is a ruling of Europe's highest court and because of the similarity in the Australian and European laws on liability for defective products. On one hand, it may be that if the decision is followed in Australia, it will be confined to the same products or to other implantable devices where the users are especially vulnerable and the consequences of the product not working correctly are severe. On the other hand, it is not difficult to think of other types of products where users are especially vulnerable and the function of the products is such that the consequences are very serious if the products do not work correctly.
The ECJ's ruling may remove an important advantage for manufacturers defending product liability litigation - the need for plaintiffs to prove that the specific product they used was actually defective, not just potentially defective because similar products were defective. Accordingly, manufacturers and importers may be exposed to liability to a much wider class of product users. This should be borne in mind by manufacturers not only when they are faced with litigation, but also earlier when they are considering the risks of bringing a new product to market.