Francisco J (Kiko) Carrión García de Parada of Eversheds Nicea, Rod Freeman of Hogan Lovells, Gordon McKee of Blake Cassels & Graydon and Archibald T Reeves IV of McDowell Knight Roedder & Sledge discuss types and level of activity, the development of the plaintiff's bar and the increasingly international nature of cases in their jurisdictions.
Francisco J (Kiko) Carrión García de Parada
Who’s Who Legal: What types of product liability defence work have been the most common in your jurisdiction over the past year? Are there any industry sectors that are particularly active?
Rod Freeman: Over the past year we have seen a continuation of the trend across Europe in which the liability risks for product manufactures are expanding beyond traditional civil liability claims. Increasingly, the defence of product liability issues involves the risk of intervention by regulatory authorities and, in some cases, the prospect of criminal prosecution as well as the risk of damages claims. To some degree, this reflects trends that we are seeing worldwide, but it is particularly acute in Europe, where changes are happening rapidly both on the regulatory front, and in the development of civil procedure regimes. These developments are also increasing the prevalence of supply-chain disputes arising out of issues affecting the safety or quality of products, including disputes over who will pay for the costs of expensive product recalls.
We are seeing these changes affect all product sectors, with the more highly regulated industries being particularly vulnerable. Claims against pharmaceutical companies and medical device manufacturers continue to be prevalent across Europe, with claims arising multiple jurisdictions being a very common feature. However, these issues also affect product sectors including motor vehicles, electrical and electronic products, machinery, toys, food and cosmetics.
We are also seeing increasing trends in Europe in the field of asbestos litigation. Whilst the health implications of past decades of asbestos use in Europe continue to grow, the nature and scale of the consequent litigation, and its expanding geographical spread, is a relatively new development.
Gordon McKee: Most of the activity in product liability litigation in Canada at present is in the class action arena. Drug and medical device product liability class actions remain common. This includes not only claims against brand manufacturers related to recalled products, but also claims related to currently marketed products and claims against generic manufacturers. However, the past year saw a number of rulings in favour of the defence in Ontario and Quebec, both on class certification and at trial, which may cause those considering future class actions in this area to look harder at what cases and claims they want to pursue. Another area that has been active is consumer product litigation, again in the class action arena.
Archibald T Reeves IV : Although the overall volume of products liability litigation appears down from the late 1990s, it continues to be an active practice area throughout the United States. As for specific market sectors, a large number of asbestos cases are currently being filed and litigated. Additionally, given a number of high-profile recalls and related news coverage over the last few years, litigation dealing with alleged automobile defects is very common. A large volume of drug and medical device cases continues, although a smaller number of firms are involved in defending the claims given consolidation within the industry. The majority of those cases follow the same mass tort model popularised by plaintiffs’ firms in the 1990s. There also appear to be isolated surges in the filings of food products cases as well. Finally, given the construction boom in the United States throughout the 1990s and into the mid-2000s, many product cases have been filed alleging commercial injury arising from defective products or products not performing as warranted or represented.
Kiko Carrión: The most common defective product cases which arose last year in our jurisdiction were related to claims which had been initiated years before, relating to alleged damages which were alleged to have been caused by different drugs and medical devices provided to patients. It is also common to find cases related to the defectiveness of appliances and parts in cars.
Who’s Who Legal: Have you found that cases are taking on an increasingly international dimension in recent times? How does your firm address such cases where similar actions are being brought in other jurisdictions?
Rod Freeman: Product manufacturers are increasingly sensitive to the fact that a challenge to the safety or integrity of their product in one jurisdiction can easily have implications for their company’s reputation, and for its risk profile, around the world. Recent history has thrown up many examples of major international brand names seeing their “local” product liability issues rapidly expand into international crises when the situation is not adequately managed locally. This is more than just a simple result of the rapid dissemination of information worldwide. We are seeing changes in the ways in which consumers share information with each other, and the ways in which consumers, and the media, respond to that information. If a product is sold internationally, every challenge to its quality or integrity, and every challenge to the good reputation of the company, will bring the risk of international consequences. To some degree, the strategies needed to manage those risks in individual cases simply mirror the strategies that international companies are already adopting to manage their business risks generally. Local knowledge and local expertise in defending claims is a given. The extra elements that need to be present in the defence team, in order to properly manage the attendant risks in an international market, are: an expert knowledge of the broader regulatory regime that governs the product in the particular jurisdiction (especially in Europe); a heightened sensitivity to the broader business priorities and needs of the international company; the ability to access knowledge of the international context and to access to the right expertise wherever it may be in the world; and experience in guiding the strategic approach to the defence of a case with the right level of consideration of what is needed to ensure the outcome best preserves the good reputation of the company in all of its markets. Whilst the specific approach to resolving each case will vary, for international companies, these factors apply equally to small cases as they do to the largest cases, whenever the reputation of the company is at stake.
Gordon McKee: Similar actions in other countries are the norm where the product liability issue is of the type that gives rise to a class action in Canada. Witnesses (both fact and expert) and documents are often located in a variety of countries. And plaintiffs’ counsel in the different jurisdictions are often cooperating or sharing work product across borders. At the risk of stating the obvious, it is critical that firms defending manufacturers under those circumstances work closely with counsel in other jurisdictions to ensure consistency and coordination as much as possible, and to take advantage of work product generated in one jurisdiction that is of general application to avoid duplication of effort and expense.
Archibald T Reeves IV : As in the past, product cases in the United States serve as a model for cases brought in other jurisdictions. Those cases in foreign jurisdictions typically follow the evidence developed in the cases here, given the comparably broad discovery process in the United States. However, in highly regulated industries, such as consumer products and pharmaceutical products, regulatory issues and investigations in other countries are drawn into litigation in the United States. This presents potential litigation difficulties as international manufacturers deal with sometimes inconsistent standards around the globe. Given the communications within the international plaintiff’s bar and broadening discovery in these cases, worldwide coordination is critical for the manufacturers addressing such litigation.
Kiko Carrión: The product liability cases that have arisen in other jurisdictions in relation to the same product are always taken as a study model by the firm in order to establish the most consistent defence possible. The weaknesses and strengths previously detected in other countries serve as examples for the defence of the case arising in Spain. For this purpose, it is usual that the sued company makes available to the Spanish firm the experience, support and collaboration of the legal counsels and experts that have dealt with the same product liability cases in other jurisdictions. Being conscious of this situation, we have created an international group specialised in product liability in order to attend appropriately to the needs and requirements of each client when involved in these type of issues. It is evidence of the international dimension that the defence of these cases is acquiring over time.
Who’s Who Legal: We received reports that the plaintiffs’ bar has become more sophisticated. Have you found this to be the case? Have there been any regulatory moves to calm – or, alternatively, to facilitate – the bringing of suits in this area?
Rod Freeman: Historically, the plaintiffs’ bar in Europe has been relatively unsophisticated overall, especially compared with counterparts in other parts of the world such as North America and Australia. We are certainly seeing changes in this regard in many parts of Europe. In some cases, we are seeing, as a new development, law firms establishing their reputation as specialists in plaintiffs’ work, and succeeding in attracting large numbers of claimants to bring claims against product manufacturers. In countries such as the UK, where historically the plaintiffs’ bar has been more developed than in most other European countries, the market is moving through a challenging time, with significant changes to the regulation of the funding of litigation being introduced in 2013. Whilst some plaintiffs’ firms have signalled that these changes threaten the viability of their practices, the market is also witnessing the entrance of sophisticated plaintiffs’ law firms from the United States and Australia, which are expected to have a long-term impact on liability litigation in the UK and on the risks faced by companies in the UK market.
Gordon McKee: The plaintiffs’ bar doing product liability work in Canada is too varied to make a useful generalisation about the level of sophistication. I think that, in general, the plaintiffs’ bar regularly handling product liability class actions is quite sophisticated, and continues to shift and adapt to changes in the law and how the courts are applying it. I believe they are trying to use what they learn from their US counterparts here, where they can. We have seen some more aggressive use of social media lately, by plaintiff advocates and their counsel. And plaintiffs’ lawyers are making more use of third-party funding in the class action arena, an activity allowed by our courts, albeit with some restrictions.
Archibald T Reeves IV : The plaintiffs’ bar in the United States continues increasing in sophistication, as reflected in both their marketing to potential clients and their investigation and prosecution of law suits. On the marketing front, the successful firms continue to rely in part on traditional radio and television advertising, but they are increasingly innovative in their use of social media and internet sites to recruit and manage large volumes of clients. Aggregation of clients continues to be the name of the game. At times, it appears such firms are ahead of, if not actively shaping, the next mass tort. Once lawsuits are under way, through networks established both in MDLs, class action management, or other interaction, the most active firms continue to pool manpower and other resources efficiently and effectively.
Kiko Carrión: Over the past few years, the law firms specialising solely in representing patients in claims for damages caused by drugs have proliferated. This definitely implies a growing sophistication at all levels – firstly, because the lawyers have a greater knowledge of the background of the cases they are dealing with; secondly, because they have developed precise strategies that can enable their clients to win the case against the product manufacturers; and thirdly, they have developed partnerships with international firms allowing them to act against foreign companies.
Who’s Who Legal: Have you seen an increase in clients settling cases? Are economic considerations a factor in difficult trading conditions? What other factors contribute to the decision to defend or settle cases?
Rod Freeman: Generally, international companies take a sophisticated view of the factors that drive the strategy in a given case. Product manufacturers are not in the business of litigating with their customers or with their business partners, and there will often be an appetite for some level of compromise if an early amicable resolution is possible, and where the claim is not entirely unjustified. However, cases sometimes arise where an amicable resolution on reasonable terms is not possible, especially where the integrity of the product is at stake. Companies are well aware that a settlement of a case can easily be more damaging than defending the case through the courts, especially where the result may have wider local or international implications. Even where a case involves a simple and relatively low-value claim by an individual consumer, companies have learned that it can easily earn a reputation for giving in easily when challenged, resulting in more, and bigger, claims over time. Where companies believe that their product is a good one, well designed and carefully manufactured, they will usually be well prepared to defend that product in the face of an unreasonable or unjustified challenge. In most countries in Europe, companies can also be relatively confident that their arguments and evidence will be properly considered by the court if the company is willing to make the investment to ensure the case is well prepared and well presented. So if the company’s case a good one, and assuming it is properly presented, the company can have some confidence of the right result at the end of the day. It is not our experience that difficult trading conditions have a big impact on these considerations. However, we do see an increase in supply-chain disputes during difficult market conditions, as companies tend to feel the financial effects of quality problems more acutely, and therefore have a higher incentive to seek redress from other parties.
Gordon McKee: Clients in this area continue to settle appropriate cases where that can be done on reasonable terms, reflecting both the relative merits of the case and the realistic potential damages. In the class action arena, however, we may see more trials because of the relatively low bar for class certification in Canada. A judgment in favour of the defence was released in the past year in the first medical device product liability class action to go to trial on the common issues in Canada. Other factors that may bear on a settlement, depending on the case, include economic considerations, potential precedential value of either settlement or a trial ruling and reputational concerns.
Archibald T Reeves IV : Product manufacturers continue to approach settlement on a case-by-case basis. As with all types of cases, the factors that play into the decision to settle include the likelihood of a plaintiff’s verdict at trial, defence costs and public relations issues that will arise both from a trial loss as well as a settlement. Most manufacturers continue to lean in favour of defending the defensible case, in order to demonstrate, both internal and externally, a willingness to defend their product and to not contribute to any perceived incentive for individuals to file other cases.
Kiko Carrión: The chance of reaching a settlement in a product liability case depends directly on the nature of each case. In the case of defective product lawsuits where the health of the plaintiff has been affected, it is less common that the parties reach an agreement. From the product manufacturer’s perspective (eg, a pharmaceutical company) reaching an agreement with the plaintiff can be seen as an assumption of its guilt. For example, there have been cases where when a product manufacturer has settled the case with a plaintiff in another jurisdiction. This fact has been used by consumers in Spain as evidence to show, before the court, the responsibility of the company. The fact that a pharmaceutical company decides to reach an agreement with a patient can be seen as an acknowledgment and assumption of responsibility regarding the damage or disease that the drug may have caused. This may set a negative precedent and may open the doors for future claims. From the plaintiff’s perspective, factors such as their economic circumstances and the odds of winning the case influence their willingness to negotiate. Notwithstanding the above, the numbers of cases settled in this area are slightly increasing, especially in relation to product liability cases related to automobile defects.