Liability Spotlight now on the Notified Bodies

Background and Context

The so-called PIP-Breast-implant scandal now reaches the Court of Justice of the European Union (CJEU). As last week a German court referred a liability case to the CJEU, it is now upon the CJEU to provide further clarity on the responsibilities and liability scheme for medical devices in the EU. The key questions relate to the responsibility of the Notified Bodies which are in charge of granting the CE mark which again is required to place medical devices on the EU market. The CJEU’s answer will have an impact on the work of Notified Bodies in the EU and will also be relevant for the liability of medical device manufacturers in the EU.

In the current case, the plaintiff has sued the German Notified Body TÜV Rheinland for damages as she had been implanted a PIP breast implant. PIP stands for the company name Poly Implant Prothèse which, for years, was illegally selling breast implants containing industrial silicone instead of the medical silicone for which they had received the CE mark. The founder of PIP and several former executives and managers were convicted of fraud and sentenced to jail by a court in France.

As PIP went bankrupt, the German plaintiff had sued PIP’s Notified Body TÜV Rheinland for damages. TÜV Rheinland was the Notified Body for PIP and in charge of conducting the conformity assessment pursuant to Article 11 of the Medical Devices Directive 93/42/EEC. This included the auditing of the quality management system of PIP, the examination of the design of the product and its surveillance. In her claim, the plaintiff alleged that TÜV Rheinland did not comply with the said obligations. She further argued that if TÜV Rheinland had adequately reviewed PIP’s business records and conducted unannounced audits and product tests, PIP’s misconduct could have been detected and further placing on the market of these products prevented.

Notified Body Liability so far: “Yes” in France – “No” in Germany

In France, patients have also sued TÜV Rheinland as Notified Body and have so far been successful before French Courts. In 2013, the French Commercial Court in Toulon found TÜV Rheinland liable towards (French) victims of PIP irrespective of whether the Notified Body itself had been systematically deceived by PIP or not. 

In contrast to the French litigation, all German courts that had dealt with the PIP cases so far held that TÜV Rheinland is not liable for damages resulting from the PIP breast implants. However, one of these cases has now eventually reached the German Federal Court of Justice (BGH) and the BGH seems to be open to accept a liability of the Notified Body but first asks the CJEU for clarification of the underlying EU rules that govern the Notified Body’s obligations.

Therefore, on 9 April 2015, the BGH has referred the case to the CJEU and is seeking clarity on the interpretation of Directive 93/42/EEC. In particular, BGH asks whether the work of a Notified Body is supposed to have a protective effect towards patients so that patients are entitled to claim damages directly from the Notified Body. The lower German courts had dismissed the plaintiff’s claims held that the legal purpose of the Notified Body’s activities did not aim to protect potential patients. The BGH does not seem to be fully convinced by this general position.

Therefore, BGH has asked CJEU to provide clarity on following questions:

1. Is it the objective and intention of the Medical Devices Directive 93/42/EEC that in case of Class III medical devices, Notified Bodies are also acting with the purpose of protecting potential patients so that the Notified Body can be liable towards patients when they negligently violate their obligations?

2. Does Annex II of Directive 93/42/EEC require that that in case of Class III medical devices, Notified Bodies also have the – general or for-cause – obligation to test the respective product?

3. Does Annex II of Directive 93/42/EEC require that in case of Class III medical devices, Notified Bodies also have the – general or for-cause – obligation to review the business records of the device manufacturer and/or carry out unannounced audits?

Perspectives and Potential Impact

The outcome of this case will, obviously, significantly impact the scope of legal responsibilities and the liability risks of Notified Bodies in the EU. If the CJEU should confirm that the work of the Notified Body aims to ensure safety of medical devices and, in so doing, should also increase the safety of the patients that may be treated with these devices, it is likely that the Notified Body will be held liable towards patients when negligently violating these obligations.

For the liability of Notified Bodies much will depend on the clear delineation of the scope of their legal obligations. These are subject to the second and third question of the BGH above. It will also be interesting to see to which extent the CJEU will consider the recent EU Commission Recommendation 2013/473/EU of 24 September 2013 on the audits and assessments performed by notified bodies in the field of medical devices.

The outcome of this case will also impact the relationship between medical device manufacturers and their Notified Bodies.

If this case should confirm a liability of the Notified Body, a subsequent question will be what this means for the product liability of the medical devices manufacturers. Currently, at least the German courts focus the liability for medical devices mainly on the manufacturer as they refused a liability of the Notified Body. This liability scheme will have to be revisited if the CJEU should confirm a liability of the Notified Body (as the above mentioned French court already did). This could even reduce the liability risks of medical devices manufacturers.

In any event, the decision of the CJEU should provide useful clarity on the scope of responsibilities of Notified Bodies in the EU so that divergent decisions in different EU Member States on the same issue can be avoided.

Even though the referral by the BGH only addresses the liability situation regarding Class III devices, the CJEU’s response may also apply to Class IIa, IIb and even certain Class I medical devices. All medical devices manufacturers should therefore closely observe this legal development.

Overall, medical devices manufacturers need to be more cautious with respect to their product liability risks and medical devices vigilance obligations in the EU. This is also recommended in the light of the recent CJEU decision in which the court substantially increased the product liability risks for medical devices manufacturers in the EU (Judgment of the CJEU of 5 March 2015 in joined cases: C-503/13 and C-504/13).