Euro News

Three Lesser Known Directives Deserving of Your Attention

In last month’s column, we discussed the issue of risk management. While that column focused on reducing risk as it relates to protecting consumer/user welfare, I want to take the opportunity to discuss a few lesser known European Directives that could have an impact on your business.

Rene van de Zande

But first, let me clarify that I am not a lawyer and certainly not qualified to dispense legal advice. This is simply an overview of three lesser known directives that can affect component and finished medical device manufacturers.  

Other than the Medical Device Directive we all know, there are three directives designed to protect consumers and users in Europe. You should have a basic understanding of each one. They are the General Product Safety Directive, Product Liability Directive and the Product Warranty Directive.

• General Product Safety Directive (2001/95/EC) The original directive (92/59/EEC) was revised and replaced with (2001/95/EC) in December 2001. The new version went into effect in most countries in January 2004 (later for 10 new EU countries and Oct. 1, 2005 in the UK). The directive covers nearly all products sold in the EU.

In general, it places responsibility on suppliers of consumer goods to make sure their products are safe for normal and foreseeable use. Obviously the goal is to make sure producers are placing safe products on the market, but it doesn’t end there. The directive requires producers to supply consumers with relevant information that enables them to assess the risks inherent in that product. It takes into account various characteristics including packaging/labeling, instructions for use and disposal, packaging, maintenance and more.

You might think that finished device manufacturers are the only ones who need to contend with the issue of product safety. Not true. Importers, private labelers, representatives and, to a lesser degree, distributors, wholesalers and retailers are all culpable as well.

The directive requires “producers” to take appropriate action in the event of a product crisis, including notifying the appropriate competent authorities, temporarily withdrawing the product from the marketplace, warning consumers of a potential problem or, in severe cases, recalling product already in the marketplace. 

To aid the compliance effort, the EU has implemented a single rapid alert system called RAPEX for reporting dangerous consumer products. It allows the rapid exchange of information among member countries. If, for example, a problem arises with your product in several member countries, that information is consolidated and may be disseminated to all EU competent authorities. At that point, a public warning might be issued or in extreme cases, a product recall might be ordered.

• Product Liability Directive (85/374/EEC) This directive was enacted some years before the Product Safety Directive. Its purpose is to impose strict liability on all parties who are involved in producing a product containing a defect that causes personal injury or property damage. It does not matter where the product is manufactured.

Article 1 of the directive says that the producer is liable for damage caused by a defect in their product. This article is the basis upon which the entire directive is formulated. So who is the “producer”? Well, producers can include the maker of any raw material or the manufacturer of a component part. It can also include private labelers, importers or any person supplying a product whose producer cannot be identified.

If you make a raw material or are a component manufacturer and there is a problem with the finished device (regardless of whether you also manufacture the finished device), you could also be held liable. The directive also sets forth the concept of “joint and several” liability, which means everyone in the production chain is on the hook in the event of a product liability damage award.

While in North America many manufacturers often include “limit of liability” clauses in contracts with buyers, the producer cannot do so in Europe regardless of what contractual arrangement they have made with the injured person. The directive notes that the upper limit of liability shall not be less than 70 million Euros. However, the individual countries can set an upper limit that may be higher than this amount.

So what happens if someone in Europe is injured by your device? The injured person is required to prove the damage, the defect in the product and the causal relationship between the two, and they have three years to seek compensation. This period begins on the date the plaintiff becomes aware of the damage, the defect and the identity of the producer. It’s important to note that national law may govern non-material damages, such as pain and suffering, although the directive does not require member countries to offer them.  The producer’s liability expires at the end of 10 years from the date on which the producer placed the product on the market (unless legal action is pending).

Just to reiterate, this is a very cursory overview of this directive and if you are really interested in what it entails, visit the EU website at www.europa.eu.int to read a full copy of it. A formal report on possible reforms to the directive is expected to be released by the Commission in 2006.

• Product Warranty Directive (1999/44/EC) In January 2002, the Product Warranty Directive on the sale of consumer goods came into force.

This directive was written in May 1999 by the European Parliament and the Council of the European Union with the objective of creating a common set of minimum rules which would remain valid no matter where in the EU goods are purchased.

Companies that sell in Europe are bound by this directive.  It specifies that the seller of a products is “liable to the consumer for any lack of conformity which exists when the goods are delivered to the consumer and which becomes apparent within a period of two years, unless, at the moment of conclusion of the contract of sale, the consumer knew or could not reasonably be unaware of the lack of conformity.”

This does not mean that you need to extend the warranties on your products to two years. Rather, the directive simply grants consumers the right to:
    —Have the goods repaired or replaced free of charge within a reasonable period and without major inconvenience;
    —An appropriate reduction in price;
    —Have the contract rescinded if repair or replacement is impossible or disproportionate.

The “contract” between you and the buyer does not have to be written. Your claims of fitness for a particular application and even your marketing materials are a form of contract.

The “lack of conformity” (i.e. a defect not caused by normal use or wear) must exist at the time of delivery and must become apparent within two years from delivery. The two-year rule does not apply to products that don’t normally have a two-year life span (e.g. disposable devices) nor for unintended uses. The consumer is not entitled to have the contract rescinded if the lack of conformity is minor. Some countries may have enacted longer periods in their national legislation so it is best to check local regulations.

Again, the directive should not be viewed as a guarantee. Normal wear and tear is not included, and the consumer does not have the power to demand a replacement regardless of the nature of the problem. Barring any warranty or guarantee offered freely by a manufacturer or distributor, the seller is only liable for any lack of conformity that exists at the time of delivery of the product. 

To limit your liability, you may want to pay close attention to the language you place on your products stating the intended uses of the product.

Rene van de Zande is president and CEO of Emergo Group, Inc., a quality assurance and regulatory consulting firm that provides authorized representation services. Emergo Group has offices in the U.S., Europe, Canada and Australia. He can be reached at [email protected].