An insight into product liability in Germany. Prepared in association with Heuking Kühn Lüer Wojtek, a leading global law firm, this is an extract from The Pharma Legal Handbook: Germany, available to purchase here for USD 99.
1. What types of liability are recognized in your jurisdiction?
Under German law, liability can result from a culpable failure to comply with contractual or quasi-contractual obligations (contractual/quasi-contractual liability), or from a failure to comply with legal obligations which are not at the same time contractual or quasi-contractual obligations (statutory liability). Statutory liability can be further sub-classified as tortious liability (i.e. liability based on culpable illicit behavior) or absolute liability (i.e. liability regardless of default).
2. How do these types of liabilities apply to the manufacturers of medicines and devices?
1. Pursuant to § 84 of the Medicinal Products Act, manufacturers of medicinal products are (regardless of default, i.e. absolutely) liable in case of death or significant damage to the health of a person caused by the use of the medicinal product, provided that the designated use of the medicinal product has an adverse impact exceeding the scientifically justifiable extent, or provided the damage was caused by the fact that labelling, the application instructions or the summary of product characteristics were not in line with the state of the scientific knowledge.
2. If the damage matches the properties of the medicinal product, the causality between use of the product and damage is (rebuttably) presumed. The liability for damage is limited to EUR 600,000 (or instalments of up to EUR 36,000 per year) per person, with a maximum liability of EUR 120,000,000 or annual instalments of up to a total of EUR 7,200,000. If these maximum sums are exceeded by the claims of a multitude of persons, the liability per person is reduced pro rata.
3. A similar absolute liability applies to the manufacturer of medical devices, pursuant to § 1 of the Product Liability Act (Act on Liability for Defective Products, Product Liability Act of 15 December 1989, as last amended on 17 July 2017) if the product is defective in the sense of the law. Liability arises if the product is less safe than one is prompted to believe based on its presentation, its expectable application and the point in time when it has been brought into circulation. The absolute liability for damage caused by a product defect to the health of several persons is limited to a maximum total of EUR 85,000,000; if this sum is exceeded by the claims of a multitude of persons, the liability per person is reduced pro rata.
4. If a medicinal product or a medical device is defective, the manufacturer is in addition also (absolutely) liable for property damages according to the Product Liability Act, with a retention of EUR 500.
5. All aforementioned absolute liability claims are compulsory and cannot be waived in advance. The absolute liability described above does not exclude liability for tort (and/or, as the case may be, contractual/quasi-contractual liability) if the damage has been caused by culpable behavior, and these possible alternative liabilities are not subject to a limitation of liability.
6. Liability under German law aims primarily to compensate the material damage that has been caused, trying to avoid any over-compensation; in other words, there are no punitive damages under German law. In the case of damage to the health of a person, liability can also include a fair compensation for immaterial damages, in particular damages for pain and suffering.
3. Does potential liability extend to the manufacturer only or could claims extend to corporate executives, employees, and representatives?
Absolute liability as described in the answer to question 54 applies only to the manufacturer. If the damage has been caused by an act of negligence or even willful misconduct of a corporate executive, an employee or a representative, these may be held liable based on the general legal provisions on tort.
4. How can a liability claim be brought?
A liability claim can be brought by means of a regular complaint in civil procedure before a court of justice.
5. What defenses are available?
First of all, the manufacturer can try to argue that the prerequisites for his absolute liability as described in the answer to question 54 are not fulfilled; this includes the possibility to rebut the presumption of causality. In addition, the absolute liability for damages caused by medicinal products is excluded if it can be assumed, taking into account all relevant circumstances, that the root cause for the adverse effects of the medicinal product are not in the areas of product development or product manufacturing (e.g., rather caused by inappropriate storage in a pharmacy or the like). In the case of a defective medical device, the manufacturer’s absolute liability is excluded if he can show that the defectiveness of the product has been caused by the manufacturer’s obedience to compulsory legal provisions, or that even using the best available science and technology, the defectiveness of the product could not be noticed when the product was brought into circulation. If the aggrieved person has contributed to the damage by own culpable behavior, liability is reduced pro rata, regardless of whether the defective product is a medicinal product or a medical device. Of course, in both cases the general defenses against any kind of claim, like limitation of action etc., are available as well.