All about product liability in Slovakian Pharma. Prepared in association with PRK Partners, a leading global law firm, this is an extract from The Pharma Legal Handbook: Slovakia, available to purchase here for USD 99.
1. What types of liability are recognized in your jurisdiction?
The Slovak legal order recognizes three types of liability: civil, criminal, and administrative.
Civil liability may be further divided into contractual liability, which results from a failure to comply with contractual obligations (e.g. failure to perform a contract or defective performance of agreed obligation) and non-contractual (delictual) liability, which results from a failure to comply with obligations stipulated by applicable law.
The Slovak criminal law is codified in the Criminal Code, which sets for particular merits of criminal offences. However, the Criminal Code binds only individuals. As of 2016, the concept of direct criminal liability of legal entities has been introduced in the Slovak Republic. This means that certain criminal offences may commit also legal entities. A legal entity shall be liable for criminal offences committed by its statutory body or its member (e.g. managing director), or its controlling or supervising body (e.g. member of the supervisory board), or any other individual authorised to represent the legal entity or adopt decisions on behalf of the legal entity (e.g. proxy) if such criminal offences were committed (i) in favour of the legal entity, (ii) on its behalf, or (iii) via such legal entity or within the scope of its business. Moreover, a legal entity will also be criminally liable in cases when the supervising person (even negligently) enabled other individual, which was acting under the authority given to it by the legal entity, to commit a criminal offence. Legal entity can be criminally liable only for committing criminal offences specifically listed in the Act on Criminal Liability of Legal Entitles.
The Slovak administrative law has not been codified so far in the Slovak Republic. It is scattered in several legal acts which specify the respective administrative offences, the sanctions to be imposed by the respective administrative authority, etc.
2. How do these types of liabilities apply to the manufacturers of medicines and devices?
One of the general principles of the Slovak legal order is that everyone shall be liable for damage caused by failure to comply with legal obligations, i.e., contractual or obligations stipulated by applicable law. Since, generally, no contract exists between the manufacturer and the third parties buying its medicines or devices on the market, if the product causes damage to these third parties, the manufacturer shall be liable for such damage on the grounds of the non-contractual (so-called “delictual”) liability. A general product liability is regulated by the Act on Liability for Damage Caused by Defective Products (based on the EU Product Liability Directive 85/374/EEC) under which a producer is liable for damage caused on health, life of other item, which results from a defective product. In this case, if the damage caused on health or life was caused to more injured parties, the liability of the producer is limited to maximum of approx. EUR 116,000,000.
The Criminal Code contains several merits related to endangering life or health, in particular endangering health due to unauthorized medicines and devices, unauthorised use and falsification of medicines and devices. However, these criminal offences inflict individuals, not legal entities. There are also certain general criminal offences, e.g. unlawful business activity, harming a consumer, which cover also legal entities in general.
The Act on Medicinal Products stipulates specific merits of administrative liability of manufacturers of medicines which include, e.g. manufacture of medicine out of scope of granted permit, failure to have or use a system for securing the quality of the production, failure to comply with the requirements of the good manufacturing practices during the production of medicinal products and the control of their quality.
As regards the medical devices, the Slovak Republic is bound by the EU Regulation on medical devices (2017/745). The Act on Conformity Assessment Procedures of Products contains sanctions for breaching certain obligations resulting from the obligatory conformity assessment procedures in relation to products which require such procedures which can be imposed also on the manufacturer of medical devices.
3. Does potential liability extend to the manufacturer only or could claims extend to corporate executives, employees, and representatives?
In general, a claim arising from the civil liability cannot extend to corporate executives, employees or representatives of the company. Under certain circumstances, the manufacturer as an entity can claim the paid compensation regressively from its corporate executives, employees or representatives. The Commercial Code stipulates the conditions of the liability of its corporate executives towards the company. Basically, the corporate executive shall be liable towards the company for all caused damage, if he/she breaches his/her obligations when acting as a corporate executive of the company, unless he/she proves that he/she was acting with professional care and in good faith that he/she was acting in the interest of the company. The liability of employees towards his/her employer is regulated in the Labour Code. Under the Labour Code, an employee is liable for damage caused when breaching his/her obligations in relation to performing working duties or in direct connection therewith and for damage caused by wilfully acting contrary to good moral conduct. The employer must prove the employee’s fault. An employee’s liability for damages caused as a result of wilful misconduct is unlimited. On the other hand, an employee can be held liable for damages caused as a result of his/her negligence only up to four times his/her average monthly salary.
The court examines who has committed a criminal offence. Therefore, if the specific individual has fulfilled all the constituent elements of merit of specific criminal offence, the court shall adjudicate that such individual is criminally liable. Under the Slovak legislation, criminal proceedings can run towards the legal entity and an individual for the same criminal offence simultaneously, whereas each is liable independently.
The Act on Medicinal Products specifies certain administrative offences that may be committed specifically by a professional representative responsible for production of medicinal products or a professional representative responsible for securing of quality of medicinal products. These representatives must be appointed in case of a manufacturer of medicinal products and must be either in employment relationship to the manufacturer, unless the representative is a statutory body of the manufacturer.
4. How can a liability claim be brought?
Civil liability claims shall be brought through civil courts.
The law contains a formal procedure for filing criminal complaints. In case of suspicion that a criminal offence has been committed, a criminal complaint may be submitted to any public prosecutor or police officer. However, only courts are entitled to decide on guilt and in this respect impose criminal penalty.
Anybody may file with the administrative body an informal complaint or request for investigation. There is generally, however, no obligation of the respective authorities to initiate proceedings upon such request. On the other hand, certain administrative body are obliged to act “ex offo” if they become aware of infringement of the respective laws.
5. What defenses are available?
Generally, the damaged party as the plaintiff has the burden of proof before the civil court that the product is defective, that the damage has occurred and the casual link between the defective product and the resulting damage. Therefore, the defendant may primarily assert that the plaintiff has failed to meet the burden of proof.
Pursuant to the Civil Code if the defendant proves that he/she/it has not caused the damage shall relieve of the liability for such damage. However, the Civil Code sets out also types of claims for damage, when the entity is liable regardless he/she/it have caused the damage or not; the Civil Code in this regard sets out circumstances under which such entity may liberalize itself.
Pursuant to the Act on Liability for Damage Caused by Defective Products a manufacturer of a defective product may liberalize itself if it proves one or more of the following circumstances have occurred:
- the manufacturer has not placed the product into circulation; or
- according to the circumstances that preceded the damage, it is probable that the product was not defective at the time when the product was put into circulation or that such defect has occurred afterwards; or
- the product was neither manufactured by the manufacturer for sale or any form of use for economic purpose nor distributed by the manufacturer within its business activities; or
- the defect has occurred due to compliance of the manufacturer with its obligations resulting from generally binding legal regulations; or
- the state of scientific and technical knowledge at the time when the manufacturer has placed the product into circulation was not such as to enable the detection of the defect.
The manufacturer of a component of a defective product may also liberalize itself provided that the defect is attributable to the construction of the complete product, in which the component has been fitted or to the instructions given by the manufacturer of the complete product or damage was caused as a result of instructions set out in manual of the complete product.
As regards the administrative liability under the Act on Medicinal Products, the manufacturer relieves itself from breaching of its obligations set out in the Act on Medicinal Products (i.e., its acting will not be considered an administrative offence), if it proves before the respective administrative authority that it could not fulfil the given obligations due to exceptional circumstances which it could not change by itself. In addition, according to the Act on Medicinal Products, the holder of the marketing authorization for a medicinal product is obliged to be responsible for damage caused by the registered medicinal product, if it was used in accordance with the data specified in the respective marketing authorization. Also, the issued marketing authorization does not relieve the manufacturer or the holder of the marketing authorization from liability for potential damage which had occurred when using the medicinal product in line with the approved summary of product characteristics and with package leaflet.