International Product Liability Review

Transcription

1 International Product Liability Review Issue 51 Contents Overview 1 Europe UK 29 JUNE Feature Navigating the discovery process in China-related crossborder disputes 2 North America US 34 Europe EU 6 Europe France 7 Europe Germany 17 Europe Italy 23 Europe Netherlands 25 Europe Spain 28

2 International Product Liability Review June 2013 Issue 51 In this issue... 1 Overview FEATURE 2 Feature Navigating the discovery process in China-related cross-border disputes Eugene Chen and Jieni Ji (Shanghai) look at some of the most common difficulties that can arise with foreign disputes involving Chinese parties, including aspects of discovery, difficulties in preserving attorney-client and attorney work product privileges, and the impact of the PRC State Secrecy Law. EUROPE EU 6 European General Court considers implications of failure to comply with Good Manufacturing Practices for medicinal products A recent decision in the European General Court confirmed that a failure to comply with the requirements of Good Manufacturing Practices can trigger significant regulatory intervention based on a mere risk of harm to public health created by that non-compliance. Rod Freeman and Vera Wichers (London) assess the implications of this decision for pharmaceutical companies. EUROPE FRANCE 7 Pesticide litigation: a move towards an asbestos-style compensatory regime? Sylvie Gallage-Alwis and Estelle Isik (Paris) look at recent case law and legislation indicating that the French authorities and courts have decided to facilitate the process of compensation for alleged victims of pesticides. This increases the risk of the phytosanitary industry being exposed to claims from employees and farmers. 11 Uncertainty for machinery manufacturers regarding compliance with safety rules Christophe Garin (Paris) reports on a recent decision by the French Supreme Court which provides further proof of the constant uncertainty for users of machinery and, indirectly, machinery manufacturers, regarding conformity with safety rules. 14 Class actions are likely soon to be introduced in France Following submission of a consumer bill to the French Council of Ministers, it appears that the French government is targeting implementation of class actions in France before the end of As Thomas Rouhette and Christine Gateau (Paris) comment, the fear is that this new tool will open the floodgates to compensation claims. EUROPE GERMANY 17 Justified product safety expectations "hot water under table unit" (Heißwasser-Untertischgerät) Markus Burckhardt and Victoria Parr (Munich) report on a recent decision in the German Federal Supreme Court commenting on the definition of defective products specifically what a justified expectation of safety should be, and by whose standards this should be judged. 20 Recent decisions regarding so-called quasi-producers under the German Product Liability Act Dorina Bruns and Eva Herion (Munich) discuss recent decisions in the German courts which indicate that if a company creates the impression of being a producer of a certain product, and assumes responsibility for that product s quality and safety, then it risks being held liable for a defect in that product.

3 International Product Liability Review June 2013 Issue 51 EUROPE ITALY 23 Contaminated blood products: Italian case law on causation and the statute of limitations Recent litigation reconfirms the significance of Supreme Court guidelines on causation and the statute of limitations. Filomena Di Marino and Jacopo Bartolomeo (Milan) report on how there is now clearly an established case-law trend affecting not just contaminated blood litigation, but also torts and product liability claims at large. EUROPE NETHERLANDS 25 Dutch District Court rules that omitting to mention the side-effect of a drug makes it a defective product Karen Jelsma and Sanne Bouwers (Amsterdam) discuss a recent District Court decision which underlines how a failure to warn consumers adequately about the potential for serious side-effects and dangers can render a product defective, even where it is in fact perfectly sound. EUROPE SPAIN 28 Class actions in Spain concerning product liability claims Rafael Fernández and Cristina Redondo Belda (Madrid) explain why an amendment to the Spanish Procedural Law (which regulates the system for collective actions ) should be expected soon, and discuss the impact this could have on class actions concerning product liability claims. 30 Law Commission and Scottish Law Commission report on UK unfair terms legislation The prominence requirements of the recently published Law Commission and Scottish Law Commission report on UK unfair terms legislation may pose challenges for businesses. Oliver Wilson (London) comments on how businesses weigh the risk of a term being challenged for unfairness against the practical constraints of what terms they can reasonably include on main order pages. 32 Penalties for parties and lawyers for using unsatisfactory witnesses Zen Cho (London) reports on two recent High Court decisions which, while they did not concern product liability, nevertheless underlined the importance of complying with the rules on the content of fact and expert evidence. NORTH AMERICA US 34 Liability of brand-name prescription drugs manufacturers for injuries caused by generic products Lauren Colton and Lindsay Goldberg (Baltimore) comment on the potential implications for brand name and generic manufacturers of a recent decision in the Supreme Court of Alabama. This ignored the fundamental legal tenet (upheld in dozens of courts) against imposing liability on product manufacturers for injuries caused by a competitor s identical product. EUROPE UK 29 Another case on foreseeability of injury for asbestos exposure after 1965 Alex Woods (London) summarises a recent case which continues a series of decisions examining the issue, previously viewed as settled, of foreseeability in cases involving asbestos exposure after 1965.

4 20 International Product Liability Review June 2013 Issue 51 Recent decisions regarding so-called "quasi-producers" under the German Product Liability Act INTRODUCTION The interpretation of quasi-producer, as defined by the German Product Liability Act ( ProdHaftG ), 1 needs to be examined in the wake of recent decisions of the Federal Court of Justice and Higher Regional Courts in Germany. These decisions highlight areas where the regulation and definition of quasi-producers could create issues for companies. Multiple companies are often named in connection with a particular product. Where this happens, it is because these parties have been involved in producing, distributing and advertising that product, along with various sub-contractors and suppliers. All of these parties may qualify as quasi-producers, even though they did not actually manufacture the product. This article will examine the conditions needed for an organisation to qualify as a quasi-producer under Sec. 4 Para. 1 Sentence 2 ProdHaftG. This is important because quasi-producers can also be held responsible for damages caused by a particular product, even if they were not involved in the production process. We will also consider the legal and practical impacts of the recent court decisions, as well as examining how parties can avoid qualifying as quasi-producers. Legal basis and background Sec. 4 Para. 1 ProdHaftG provides definitions of producer and quasi-producer. According to Sec. 4 Para. 1 Sentence 1 ProdHaftG, a producer is someone who has manufactured a final product, a basic substance or a component part of a product. Sec. 4, Para. 1 Sentence 2 ProdHaftG extends the scope of the legislation to include quasi-producers, which means any parties that, by attaching their name, trademark or other distinctive mark, create the impression of being a producer. Any party representing itself as a producer is potentially liable, even if it is not the producer of a specific product. responsible for the product. 2 The fact that the actual producer of the product is also liable under Sec. 4 Para. 1 Sentence 1 ProdHaftG does not exclude the quasi-producer s liability. 3 The quasiproducer cannot exonerate itself by identifying the actual producer. 4 Recent decisions and main issues The German Federal Court of Justice and Higher Regional Courts recently decided several cases that relate to possible quasi-producer status. Two questions arose that are highly relevant to day-to-day operations: Can a party be qualified as a quasi-producer, despite not being mentioned on the product itself? Can it be found liable as a quasi-producer, despite not having agreed to its name or trademark being mentioned on the product? Can a party be qualified as quasi-producer, despite not being mentioned on the product itself? In a recent case decided by a Higher Regional Court in Germany, the name of a product's distributor was mentioned in several documents that were provided with the product. 5 However, the name of the distributor was not imprinted on the product itself. The question was whether mention in the accompanying documentation was sufficient for the distributor to be qualified as a quasi-producer under Sec. 4 Para. 1 Sentence 2 ProdHaftG. The Higher Regional Court did not entirely exclude the possibility of the distributor being regarded as a quasi-producer, although its name did not appear on the product itself. This interpretation raises the risk that parties mentioned in connection with a product could be held responsible for any damage it may cause. According to Sec. 1 Para. 1 ProdHaftG, the actual producer and the quasi-producer are jointly responsible for damage caused by a product. The responsibility of the quasi-producer is based on the idea that it has created the impression that it is 2 3 BGH, NJW 2005, 2695, MüKo/Wagner, Sec. 4 ProdHaftG, recital 22, Palandt/Sprau, Sec. 4 ProdHaftG, recital 6. 4 MüKo/Wagner, Sec. 4 ProdHaftG, recital Sec. 4 Para. 1 Sentence 2, the German Product Liability Act (Produkthaftungsgesetz, ProdHaftG ). 5 Decision of Higher Regional Court Koblenz of 24 July 2012 (case reference 5 U 299/12).

5 International Product Liability Review June 2013 Issue Recent decisions regarding so-called "quasi-producers" under the German Product Liability Act Considering the overall picture However, these risks can be minimised. The Higher Regional Court ruled that other aspects play a significant role, notwithstanding the fact that a company's name is mentioned together with a product. In particular, the overall picture that any party presents in relation to a product has to be considered. 6 In that regard, several aspects become relevant, including, for example, the style or size in which the name or the trademark is imprinted. It is therefore recommended that where a company was not the producer of a certain product, it takes steps to ensure that its presentation in connection with that product differs substantially from the actual producer s presentation. Name on documentation not sufficient German legal textbooks indicate that merely having the name or trademark imprinted on a bill or delivery note is not sufficient to identify that person or entity as the producer. 7 It is common for the distributor, rather than the producer, to be named on a delivery note or bill, but this does not create a sufficiently strong link to the product. Therefore, it cannot be assumed that the person named on the bill or delivery note is the producer of the product. In particular, these documents do not mean that the named party participated in the production process and therefore had an influence on the product s quality and safety. In light of the above, it is clear that determination of a party s qualification as a "quasi-producer" will be decided on a case-by-case basis. It is therefore important for companies clearly to define their role with regard to a specific product and to avoid any scope for ambiguous interpretations. Can a party be found liable as quasi-producer, despite not having agreed to its name or trademark being mentioned on the product? In general, a party wishing to be associated with a certain product would attach its name or trademark to it. Additionally, it is common practice for that party not to attach its name or trademark itself, but instead to authorise a third party to do so on its behalf. In both 6 7 Decision of Higher Regional Court Koblenz of 24 July 2012 (case reference 5 U 299/12); Judgment of Higher Regional Court Düsseldorf of 14 March 2012 (case reference I-15 U 122/10). MüKo/Wagner, Sec. 4 ProdHaftG, recital 25. cases, the party that is presented on the product would generally fulfil the requirements of Sec. 4 Para. 1 Sentence 2 ProdHaftG. Name attached without permission However, it is also possible to imagine cases where third parties attach the name or trademark of the party concerned with a product without having permission to do so. According to the jurisdiction of German Courts, parties that are not aware of being mentioned on, or in connection with, a product do not qualify as quasiproducers. 8 Therefore, the producer is not liable in cases of piracy or counterfeiting. 9 Nevertheless, if the party concerned gives permission before or after the process of somebody else attaching its name or trademark, this person can be regarded as quasi-producer under Sec. 4 Para. 1 Sentence 2 ProdHaftG. Permission can be granted by an explicit approval or an action that implies approval. 10 It is therefore important that any party involved as, for example, distributor, sub-contractor or supplier of a certain product, should not take any action that could be interpreted as approval. As a precaution, they should not allow their name to be mentioned in connection with a product without first having seen the details and exact wording of its presentation. Specific permission In a recent judgment, the German Federal Court of Justice held that permission must be granted for a specific product. 11 Following this decision, it is not sufficient for a party to agree generally to its name or trademark being attached to a product, without this permission referring to a specific product. According to the German Federal Court of Justice, the liability of the quasi-producer arises from the fact that the party mentioned on or in connection with a product is drawing attention to its reputation and care for its quality and safety. Therefore, a party should only be liable in cases where it has clear influence on a specific product s manufacturing process Judgment of the German Federal Court of Justice of 21 June 2005 (case reference VI ZR 238/03); NJW 2005, 3179, 3181; Staudinger/Oechsler, Sec. 4 ProdHaftG, recital 57. MüKo/Wagner, Sec. 4 ProdHaftG, recitals 24. MüKo/Wagner, Sec. 4 ProdHaftG, recitals 24, 61. Judgment of the German Federal Court of Justice of 21 June 2005 (case reference VI ZR 238/03).

6 22 International Product Liability Review June 2013 Issue 51 Recent decisions regarding so-called "quasi-producers" under the German Product Liability Act COMMENT Case law regarding Sec. 4 Para. 1 Sentence 2 ProdHaftG does not always provide precise and predictable standards for quasi-producer status. In cases recently decided by German courts, determination of a party s liability as quasi-producer was decided on a case-by-case basis. Companies that create the impression of being a producer of a certain product, and assume responsibility for its quality and safety, risk being held liable. This situation should be carefully monitored by companies. As a first step, they should minimise their potential exposure by only allowing markings that are absolutely necessary. Dorina Bruns Munich dorina.bruns@hoganlovells.com Eva Herion Munich eva.herion@hoganlovells.com