EU judgment on liability for monitoring and inspection of manufacturers of medical devices
In a recent case, the European Court of Justice ("ECJ") has found who can be held liable for a loss suffered due to failure of monitoring and inspection of manufacturers of medical devices. The end users of medical devices should be aware of this in connection to entering into agreements with manufacturers.
In said case, the Court found that not only manufacturers of medical devices can be held liable for damage caused by the device. Depending on the circumstances, a notified body - a public or private company which have been authorised to certify and monitor that manufacturers of medical devices observe the documentation requirements laid down by the legislation - may also incur liability. In Denmark, only one private company has been authorised, but Danish manufacturers may choose to authorise notified bodies in other countries.
The case concerned the loss suffered by a German woman who had had breast implants containing silicone that did not meet the quality standards. The manufacturer became insolvent and therefore, the woman claimed damages from the private company which the manufacturer had authorised to audit its quality system.
The ECJ determined that notified bodies according to the directive on medical devices (no. 93/42/EEC) are "…not under a general obligation to carry out unannounced inspections, to examine devices and/or to examine the manufacturer's business records." Further, the Court determined that notified bodies "…in the face of evidence indicating that a medical device might not comply with the requirements laid down [in the directive]…" must "…take all the steps necessary to ensure that it fulfils its obligations under … the directive." This may for example entail withdrawal of the certification for a particular product.
Additionally, the court also found that regardless of the fact that notified bodies are ordered to perform inspections according to the directive, this does not entail that it can be assumed that "…the purpose of the directive is to govern the conditions under which the end users of medical devices may be able to obtain compensation for culpable failure by those bodies to fulfil their obligations." Therefore, the conditions for a notified body to incur liability to the end user of the medical device are governed by national law of the individual EU Member State.
First of all, the judgment shows that notified bodies cannot in general be liable to pay damages for which the manufacturer is responsible. Before liability can occur a specific assessment should be made in relation to the country's legislation which the company of a body is subject to.
The end users of medical devices should be aware of this issue. If compensation due to damage caused by the medical device cannot be recovered by the manufacturer, the notified body which the manufacturer has authorised and the country where it is located may determine whether one can be compensated. Depending on the circumstances, this risk should be covered by the agreement between the manufacturer and the end user.
The judgment by the European Court of justice can be found here
Information of the notified bodies can be found here