Regardless of negligence or fault, manufacturers of medical devices are liable under national laws implementing the EU Product Liability Directive, usually in addition to a fault-based national tort liability regime.
The Medical Devices Regulation, to be applied from 2020, contains an additional requirement that manufacturers (situated both inside and outside the EU) must back up their product liability by providing sufficient financial coverage in respect of their potential liability. Financial coverage must be proportionate to the risk class, the type of device and the size of the enterprise.
However, nothing is said on how to reliably measure what is meant by “sufficient financial coverage in respect of their potential liability”.
This prompts important questions:
Who will establish the criteria here? How can manufacturers be sure to fulfil their legal obligations?
There is another uncertainty on how providers of financial coverage will react to the new rule and are insurance costs going to rise?
In addition, whereas the proportionality of financial coverage with the type of device and risk class seems logical, the logic of predictability and the relation to “the size of the enterprise” is questionable. Considering that the products of the rather small PIP company affected hundreds of thousands of women around the world and caused one of the biggest scandals in the medical devices sector, the question arises whether it is the size of the company that should really matter.
Although this new obligation applies solely to manufacturers, nevertheless distributors and importers should be aware of the fact that they may become a quasi-manufacturer under certain conditions, such as making a device available on the market under their name, registered trade name or registered trade-mark. In these cases they will assume the obligations incumbent on manufacturers.
We note that authorized representatives of MD manufacturers not established in the EU will also be jointly and severally liable along with the manufacturer in cases where the manufacturer has not fulfilled its obligations.
It is doubtful whether the additional provision adds any value to the liability regimes already in place. It is also questionable whether financial back-up is going to offer better, surer protection to patients in situations such as the PIP scandal. And no criteria are set for assessing “sufficient financial coverage” in respect of potential liability.
One thing is clear, though: All manufacturers of medical devices, especially smaller companies, whether inside or outside the EU should prepare for this additional requirement and evaluate the additional anticipated costs.
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