Product liability: German court ruling sets further standards for the interpretation of defect and longstop

It is no secret that the terms used in the EU Product Liability Directive 85/374/EEC (PLD) leave a lot of room for interpretation. A judgment from the Berlin Higher Regional Court, in a case where we acted for the defendant, provides some useful clarification in this regard.*

In particular, the decision relates to:

• the requirements of a product defect, in particular with regard to a necessary utility-risk analysis and to the scope of the European Court of Justice’s (ECJ’s) Boston Scientific judgment; and
• for the longstop, the relevant link of putting the actual product into circulation when this product consists of multiple components.

A copy of the decision is available here (in German).

1. Product defect

Generally, the PLD provides that a product is defective when it does not provide the safety that a person is entitled to expect, taking all circumstances into account. This link to ‘the safety which a person is entitled to expect’ has already been subject to discussion ever since the PLD came into force, as some would say that it does not allow for objective criteria.

Although different member states take different approaches, German case law has in response developed the terms of a design, a manufacturing and an instruction defect for approaching the centerpiece of the PLD.

Design defect

In the context of a design defect, and against the background that even the PLD does not provide for an absolute safety of a product, the Berlin Court’s recent decision stressed the importance of conducting a utility-risk analysis for assessing product defect under the Directive (or the culpability within tort law).

In the case of the product at hand – an artificial joint allegedly suffering from excessive wear – the Court found that the product was not defective because, among other reasons, the potential risks of a product always have to be weighed against its expected advantages, with the relevant point in time for the assessment being the time that the product was put into circulation.

In particular, the Court found that ‘abrasion is inherent to artificial joints and is to be accepted in return for the eliminated pain and restricted mobility caused by a degenerated or traumatically injured joint. When implanting an artificial joint, it is therefore a question of risk assessment or utility-risk analysis, whether to accept increased metal abrasion for the benefit of better safety with regard to dislocation and a “more natural” static in the joint compared to [other] devices that was… expected in the medical community at the time of the introduction of [the type of device in question]’.

Potential defect

Based on the ongoing discussion on the scope of the ECJ’s Boston Scientific ruling, the Berlin Court also provided a clear and much-requested restriction.

In Boston Scientific, the ECJ developed the concept of a ‘potential defect’ by saying that ‘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 (ICDs), 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 underlying cases were very specific, though, which appears to be ignored in some discussions on this judgment. In particular:

• the patients that were implanted with the pacemakers and ICDs were suffering from severe heart disease and were therefore very vulnerable;
• due to the life-sustaining nature of the pacemakers and ICDs, a failure of these devices would had constituted an abnormal potential for damage for the patients concerned, namely a severe risk of death; and
• due to a specific component of the ICDs in question, which suffered from gradual degradation, the group or production series of the devices had a significantly increased risk of failure, but it could not be said whether any individual device suffered from the defect without surgery to remove it.

In these cases, said the ECJ, the patients concerned would not have to wait for their device actually to fail (ie risking their life) but could undergo precautionary early revision, responsibility for which was assigned to the manufacturer on the basis that it was liable for this ‘potential defect’.

Unsurprisingly, it did not take long, however, before some began to argue that a ‘potential defect’ constitutes a new category of product defect that does not only relate to the specific situation of Boston Scientific but that should also be applied to other medical devices, such artificial joints, and to increased revision rates (instead of defect-based failure rates).

The Berlin Court’s judgment has put an end to these discussions, at least to some extent. It says that ‘the fact that the device belongs to a design form that produces (potentially even increased) metal abrasion does not constitute a potential defect’.

The Court justifies this by noting that:

• all artificial joints have abrasion the body has to cope with, and metal abrasion as such does not lead to more severe bodily harm given that tissue reactions on abrasion and a loosening may also occur if non-metal devices are used; and
• even if a device design is generally associated with increased abrasion, this per se does not constitute a situation that necessitates early revision surgery in a specific case.

After the long-lasting discussions on the scope of Boston Scientific, this limitation was more than overdue and necessary.

2. Longstop 

The Berlin Court further provided very helpful guidance on the interpretation of the so-called longstop in the PLD.

In addition to normal limitation rules, the PLD provides for an expiry of product liability claims after 10 years from the date on which the producer put into circulation the actual product which caused the damage.

The ECJ (in its O’Byrne judgment) already determined that, while the term ‘putting into circulation’ is not to be uniformly interpreted within the PLD, for the longstop, the relevant time is that when the product is taken out of the manufacturing process operated by the producer and enters a marketing process in the form in which it is offered to the public in order to be used or consumed.

In German case law and legal literature, it is also accepted that the date on which a producer puts a product into circulation has to be determined individually if there are different actors liable as a producer, so that the relevant dates will differ. The Berlin Court now clarifies that the same applies for products consisting of several components that are marketed individually and assembled later.

Comprehensibly, the Court notes that, for the producer of such products, the point in time when the individual components were placed on the market is decisive and not the one when the components are subsequently assembled. Specifically for artificial joints, the Court notes that the ‘device components are implanted as individual parts within an operation and not as an “entire system”’ so that the dates when the individual components were marketed is relevant in the context of the longstop for the producer and not the one of the implantation.

* In January 2021, after the German Federal Court dismissed the claimant’s non-admission complaint, the judgment from the Berlin Higher Regional Court (20 U 115/17, 27 May 2019) eventually became final.