Tag Archives: product liability

AI Liability Directive: Key Takeaways

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We have already illustrated the new proposed rules for a product liability directive on this blog. We now analyze the proposal for a AI Liability Directive, which offers interesting insights on how liability rules will be tweaked when Artificial Intelligence is concerned. In fact, as noted by the Commission’s explanatory memorandum to the AI Liability Directive, “the ‘black box’ effect can make it difficult for the victim to prove fault and causality and there may be uncertainty as to how the courts will interpret and apply existing national liability rules in cases involving AI“.

These slides may help understanding the AI Liability Directive. If you have questions or doubts, do not hesitate to reach out to us.

Healthcare, Technology and Malpractice in 2030

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The “Home-Spital” of 2030.

I have enjoyed reading this article on what healthcare may look like in 2030 (in wealthy countries, may I point out). The author of the article says goodbye to the hospital, while welcoming the “home-spital”. She imagines that technology (think driverless cars and robot workers) will help us live in a safer world. Technology will also help preventing certain diseases. Regenerative options will slow down ageing. “You will go to hospital to be patched up and put back on track. Some hospital practices might even go away completely, and the need for hospitalization will eventually disappear. Not by 2030, but soon after”, she predicts.

Healthcare and Technology will be Increasingly Intertwined.

Telemedicine may become so pervasive that hospitals may be empty of patients and filled with patients’ data, continuously fed through wearable patient-monitoring devices or all kinds of sensors. Hospitals may become bio-printing laboratories, where 3D printers will manufacture organs, tissues and bones on demand.

It is somewhat uplifting to imagine that medicine may become so technologically advanced, so personalized and so effective, and health so plentiful. Others, however, warn against the threat of a de-humanized medicine that will solely rely on machines and will be unable to offer a human side to suffering individuals.

Will Technology Render Doctors Error-Free?

While this new world will pose issues of privacy, data security and fraud, will it solve the problem of malpractice? What will be the role of doctors in 2030? Will technology eradicate human error?

Technology is already helping doctors in many ways: drugs, devices, diagnostic instruments are now less harmful, more precise and a lot more effective. Watson computer is assisting oncologists finding the appropriate cure. Simulators helps doctor in their training and in performing surgical procedures. Checklists, protocols and guidelines can be embedded in the doctors’ routine so as to limit, recognize or avoid repetition of human error. We can foresee a world of doctors who follow protocols embedded in devices, leaving less room for deviation from standard practice, but also from mistakes: a computerized doctor, almost. Will this make doctors error-free?

Of Course, Technology can be a Source of Error, too.

The idea of technological devices that are perfectly designed and always perfectly functioning is false, as any product liability lawyer knows. Even the best technology is subject to faulty design of a whole line of products, or faulty manufacturing of a single product.

Malpractice and Product Liability Litigation may Merge in 2030.

Litigation may simply become more complex. In fact, doctors will be sued by patients along with creators of health apps, health data centers, data carriers, device or drug manufacturers, subjects who feed data to 3D printers or who analyze and monitor data processed by devices. It will be increasingly harder to disentangle doctors’ negligence with liability of med-tech, diagnostic or pharma companies. Litigation will rely even more heavily on the opinion of court appointed experts, who will need to be a panel of specialists with bioengineering, medical and information technology skills.

Two classes of doctors will probably emerge, even more distinctively than before: doctors who follow protocols suggested by computers, whose tasks will become closer to those of paramedics, and doctors engaged in research who write protocols that will bind other doctors. The first class will probably see a reduction in its freedom to make medical choices, but may be increasingly shielded from medical malpractice litigation. The protocol-writing doctors will work even more closely with the industry that designs, tests and manufactures medical technology.

Watch Out for the Paradox of Automation!

As this very interesting article (based on an analysis of the 2009 crash of Air France Flight 447, which killed 228 people) suggests, the so called “Paradox of Automation” could come into play. Tim Harford, the author, explains it as follows: “First, automatic systems accommodate incompetence by being easy to operate and by automatically correcting mistakes. Because of this, an inexpert operator can function for a long time before his lack of skill becomes apparent – his incompetence is a hidden weakness that can persist almost indefinitely. Second, even if operators are expert, automatic systems erode their skills by removing the need for practice. Third, automatic systems tend to fail either in unusual situations or in ways that produce unusual situations, requiring a particularly skilful response. A more capable and reliable automatic system makes the situation worse.”

Technology that babysits doctors may ultimately weaken their skills. While automated devices may limit small errors, they may “create the opportunities for large ones”.

Conclusions.

Technology surely helps, who could deny that? But a messianic hope that technology will propel us into a risk-free, error-free and… malpractice-free world is a simplistic approach that is plain wrong.

Legal Issues 4.0: what approach suits innovation better?

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The fourth industrial revolution is undoubtedly on the bull’s eye of international and domestic economic discussions. To name just one of the major events that recently focused on the Industry 4.0 debate, one could mention the World Economic Forum 2016 Annual Meeting held in Davos on January 20-23 2016, together with its ambitious title: Mastering the Fourth Industrial Revolution.

Indeed, starting from Germany’s Industrie 4.0, European governments have been trying to master the demanding challenges that the fourth industrial revolution brought, taking co-ordinate actions with companies and research institutions in order to attract investments and be more competitive in the global manufacturing scene.

At a glance, Industry 4.0 consists in the transformation – or rather the evolution – of industrial manufacturing based on the new possibilities offered by:

  • The ability of machines, devices and sensors to connect and communicate with each other and analyze/process large amounts of data;
  • The ability of information systems to create a virtual copy of the physical world by enriching digital plant models with sensor data;
  • The ability of assistance systems to support humans by aggregating and visualizing information comprehensibly for making informed decisions and solving urgent problems on short notice;
  • The ability of cyber physical systems to physically support humans by conducting a range of tasks that are unpleasant, too exhausting, or unsafe for humans;
  • The ability of cyber physical systems to make decisions on their own and to perform their tasks as autonomous as possible.

The phenomenon hence embraces many fast-evolving fields such as Robotics, Internet of Things, Big Data and Smart Data.

After Germany, other European as well as oversea governments took actions aimed at exploiting, promoting and fueling with investments the research and development driven by such innovations. The United States started Manufacturing USA and France announced Industrie du Futur, to name just a few of such governmental programs.

Lastly, here in Italy, only a few days ago the Italian government announced the main features of its national Industria 4.0. The plan will make available public investments up to ten billion euro between 2017 and 2020, providing for tax incentives, as well as support for venture capital, ultra-broadband development, education and innovative research centers.

A number of legal issues are raised by the fourth industrial revolution.

  • The first and – one would say – more obvious one, is related to data protection. Intelligent and multi-linked objects continuously collect, generate and transmit data (including personal data) that are processed and analyzed, often across State’s boundaries, by both automated and manual means. It is hence fundamental that data protection laws and regulations offer appropriate legal instruments to control and limit what can potentially become an uncontrolled and automated leakage of personal data.
  • Property law is also at stake. In particular, in relation to non-personal data produced by machines and objects, ownership of such “products” seem to be mainly unregulated, with the exception of some specific instruments subject to database’s Moreover, moving towards more typical IP issues, it is clear that enhanced digitalization and connectivity both bring the risk of not being able to effectively keep trade and industrial secrets, as well as not being able to protect undisclosed know-how and business information.
  • Labour law will have to find instruments in order to manage the potential job loss deriving from automatization and innovation.
  • Product liability and, more in general, the legal framework of civil (and criminal) wrongs will have to face the fact that machines are more and more able to communicate, act and, in a way, “think” autonomously.

Can these challenges be tackled with existing legal instruments or do they require the adoption of tailor-made, brand new solutions?

The legal fields that have been mentioned here are, indeed, varied and do not allow one straightforward answer. Nevertheless, it may be worth noting that pushing for over-specific and unrealistically always-up-to-date legal instruments can be very risky. It can result, in fact, in a never-ending (but always late) frantic chase of fast-pacing technological developments, which can be more effectively tackled by adapting traditional flexible tools.

As it has been recently underlined by a study led by the European Parliament, “many of these issues have a cross-border and even pan-European element, e.g. migration of skilled labour, completing the digital single market and cybersecurity, cross-border research, standards etc”.

Perhaps, the success of the fourth industrial revolution from a legal point of view will largely depend on the ability and willingness to find harmonized and common solutions to global challenges, rather than create over-particular and specific new instruments. From this perspective, the new European Regulation on Data Protection can be seen as an encouraging legislative action providing for flexible but effective tools (such as, for example, data protection by design and data protection by default provisions) within the framework of the harmonizing strength of the European Regulation legal instrument.

Defective Medical Devices: an Interesting Decision by the ECJ

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On March 5, 2015 the European Court of Justice (“ECJ”) delivered a ruling on product liability that could have consequences for manufacturers of medical devices.

FACTS OF THE CASE. The quality control system of a company selling pacemakers and implantable defibrillators in Germany found that a component utilized to hermetically seal pacemakers may experience a gradual degradation. That defect could lead to premature battery depletion, resulting in loss of telemetry and/or loss of pacing output without warning. In light of such circumstances, the manufacturer issued a warning recommending physicians to replace the implanted pacemakers with others provided free of charge. At the same time, the manufacturer also recommended physicians to turn off a switch in the defibrillators.

PROCEEDINGS. The insurance companies, covering patients whose pacemakers or defibrillators had been replaced, instituted legal proceedings to obtain reimbursement of costs relating to such replacements. The German High Court raised a preliminary question before the ECJ asking whether the devices that had been replaced may be classified as defective, despite lack of evidence that the actual product implanted was defective, on the basis of the corrective measures recommended by the manufacturer. Moreover, the German Court asked whether costs of replacing those pacemakers and defibrillators could be classified as damages, for which the manufacturer may be liable pursuant to the Product Liability Directive[1].

ECJ RULING. In its ruling, the ECJ stated that, in order to determine whether or not the manufacturer was liable, (i) the function of such products, (ii) the vulnerability of patients utilizing them, (iii) the costs borne to replace them, and (iv) the costs relating to turning off the switch of defibrillators had to be taken into account and balanced. In this respect, the ECJ observed that even the potential lack of safety of those products gave rise to the manufacturer’s liability, in light of safety standards that patients could expect from that kind of products and the abnormal possibility of damages to patients, who would be at risk of death. In addition, and in more general terms, the ECJ affirmed that costs borne to replace potential defective devices may constitute damages inasmuch as the expenses incurred are necessary to remedy the defect. However, such a judgment, as pointed out by the ECJ, pertained to the merits of the claim, and must therefore be ascertained by a national Court.

CONSEQUENCES OF THE RULING. Under the Product Liability Directive claimants must produce evidence of the defect, damages arising therefrom and a causation link between the two. By contrast, the ECJ’s decision establishes that even potential defects may be considered as defects. As a consequence, consumers appear to be relieved from the burden of proof that products are actually defective. By the same token, manufacturers’ right of defense seems to be compressed, as – when there are corrective measures recommended by them – the ruling does not leave any room for proof of lack of liability.

WHAT WILL BE THE IMPACT OF THE RULING.  The ECJ’s approach to product liability adopted in the ruling at hand appears to be skewed towards consumers’ protection. A cynical reading of the ECJ’s judgment may even prompt manufacturers to be reluctant to “admit their own mistakes” and issue safety warnings regarding their products! As often happens with legal issues affecting innovation and health policies, balancing of interests is key.

[1] Council Directive 85/374/EEC of July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products. According to the Directive, the producer is liable for damages caused by a defect in his product.