'Necessary' surgical costs can be claimed from manufacturers of defective medical devices, rules EU court

Product liability specialist Manoj Vaghela of Pinsent Masons, the law firm behind Out-Law.com, said, the judgment could "focus the minds of private medical health insurers in their efforts to recover money after they have paid out under private medical health schemes". Vaghela also said the case highlights the need for medical device manufacturers to have indemnities from those supplying them with component parts as well as good insurance. 

"Currently in the UK the government has set up the Compensation Recovery Unit by which the NHS can claim back the cost of care from defendants in litigation," Vaghela said. "This is a statutory scheme and motor insurers and product liability insurers have to obtain a CRU certificate prior to settling any case."

"However private health insurers, which pick up the tab in place of the NHS where patients have private healthcare, may look at this ruling to see whether they can recover the cost of treatment from the product manufacturers and the manufacturers’ insurers," he said.

In its ruling, the CJEU said that a medical device can be held as 'defective' if a potential problem with a batch of devices that device is part of is identified. It said it is not necessary to identify the defect in each individual device to determine them all to be defective.

The Court also said that medical device manufacturers can be held liable for the cost of "necessary" surgery to replace defective devices, but that it is up to national courts to "verify whether that condition is satisfied" in the cases before them.

"Where it is found that products belonging to the same group or forming part of the same production series, such as pacemakers and implantable cardioverter defibrillators, have a potential defect, such a product may be classified as defective without there being any need to establish that that product has such a defect," the CJEU ruled.

"The damage caused by a surgical operation for the replacement of a defective product, such as a pacemaker or an implantable cardioverter defibrillator, constitutes ‘damage caused by death or personal injuries’ for which the producer is liable, if such an operation is necessary to overcome the defect in the product in question," it said.

The CJEU was ruling in joined cases referred to it from Germany, where the Federal Court of Justice has asked it for help in interpreting EU rules on product liability. The German court said the legal guidance would help it determine whether the manufacturer of certain pacemakers and cardioverter defibrillators should have to pay compensation to health insurers for the costs those insurers incurred in pay-outs when policy holders underwent surgery to have the devices they had implanted replaced.

Under the EU's Product Liability Directive, product manufacturers are generally "liable for damage caused by a defect" in their product.

For the purposes of the Directive, 'damage' is in part defined as "damage caused by death or by personal injuries". It also states that a product should be considered 'defective' when "it does not provide the safety which a person is entitled to expect, taking all circumstances into account, including: the presentation of the product; the use to which it could reasonably be expected that the product would be put; [and] the time when the product was put into circulation".

In one of the cases before the German court, two patients had pacemakers they had fitted replaced after the manufacturer of those devices said its quality control systems had found that a component for its pacemaker devices could potentially degrade, according to the CJEU's judgment. The flaw could, the ruling said, ultimately lead to "loss of telemetry and/or loss of pacing output without warning".

In the other case, a patient fitted with a cardioverter defibrillator had that device replaced after the manufacturer's quality control systems found a flaw in a component it used within those devices which could cause the device not to perform a "life-saving" function, the CJEU said.

Each of the patients had medical insurance cover and claimed the cost of surgery through their insurer. Those insurers, however, have argued that they should be able to recover the cost of their pay-outs from the medical device manufacturer.

According to the CJEU, the German court said that the insurers' cases depend on whether the pacemakers and cardioverter defibrillator devices fitted in the patients they paid out to could be considered to be defective products under the EU's Product Liability Directive.

Although the manufacturer of the devices had flagged potential flaws with the devices it had made and that they were "part of a group of products that pose a risk of failure", it had not been determined whether the individual devices replaced in the cases before the German court were "themselves defective", according to the CJEU's ruling.