IE Ltd ("IE") produced Isolagen, a cosmetic product designed to treat the signs of aging skin. The manufacturing process involved taking a sample of a patient's skin cells and placing them in foetal calf serum (FCS), a bovine product, to grow fibroblasts (skin cells that produce collagen). The fibroblasts were washed clean of FCS, and then injected into the patient. IE, along with certain clinics that offered the Isolagen treatment, drafted and published brochures explaining this process, which stated that Isolagen contained nothing other than the patient's own cells.
A number of patients who had undergone the Isolagen treatment discovered that it had contained traces of FCS. These patients sued the doctors and clinics who had provided them with the treatment, alleging that they had been misled by the brochures as to the purity of Isolagen. The Claimants did not pursue a product liability action against IE as the company was in administration.
The first instance judge found in favour of the Claimants, and held that, by handing the brochures to the Claimants, the clinicians had made misrepresentations as to the purity of Isolagen. The clinicians appealed to the Court of Appeal arguing that:
- they were not responsible for the statements in the brochures; and
- those statements were substantially correct.
In the leading judgment in the Court of Appeal, Lord Justice Jackson applied IFE Fund SA v Goldman Sachs International, considering the test of what a reasonable person would have inferred was being implicitly represented by the words and conduct in the context. The Court concluded that a reasonable person standing in the shoes of the Claimants would consider that the clinicians were adopting the contents of the brochure. The following factors were highlighted as important in reaching this conclusion:
- the imbalance in knowledge of the treatment between the patients and clinicians;
- the sale of Isolagen as a product, not just the treatment in general;
- the fact the patients did not need Isolagen, but chose it, relying on the brochures; and
- the lack of disclaimer by the clinicians about the information in the brochures.
Jackson LJ, in dismissing the Defendant's argument, held that it was material that there was FCS in the Isolagen, even in trace amounts, because of expert evidence that between 3 and 10 percent of the population have a propensity to suffer an allergic reaction to bovine products; and because the presence of FCS might have had impacted the patients' decision to have the treatment.
This case is a caution to providers of end products and services against giving their clients and customers material produced by manufacturers or other entities in the supply chain, without a disclaimer as to the accuracy of the material's content.