GILL v ETHICON SÁRL & ORS (NO 5) [2019] FCA 1905
This was a representative proceeding under Part IVA of the Federal Court of Australia Act 1976 (Cth) concerning nine uro-gynaecological devices developed and manufactured by two foreign companies, Ethicon Sárl and Ethicon Inc (the Ethicon entities), both part of the Johnson & Johnson Group of Companies- which devices were marketed and sold by a related Australian company, Johnson & Johnson Medical Pty Ltd (J&J).
The decision of Katzmann J was handed down on 21 November 2019 and found in favour of the applicants (and the group).
The devices were made from polypropylene mesh and were used to treat women suffering from two common complications of childbirth, pelvic organ prolapse or stress urinary incontinence.
The three applicants commenced proceedings against the two Ethicon entities and J&J on behalf of themselves and the other women in the group, all of whom suffered complications following the implantation of the devices, alleging that the respondents had contravened various provisions of the Trade Practices Act 1974 (Cth) and the Competition & Consumer Act 2010 (Cth) and were also liable for damages in negligence.
At the commencement of the trial, there were approximately 700 members in the class; however, in her decision, Katzmann J acknowledged that the group could be much larger as not only was the class open, but more than 90,000 Ethicon devices had been supplied in Australia.
The applicants alleged that the devices had caused various complications to recipients, including chronic inflammation, extrusion or erosion of the mesh into surrounding organs, infection, chronic pain, pain during sexual intercourse, urinary incontinence, recurrence of prolapse and damage to surrounding organs and nerves.
Whilst the respondents did not dispute that the complications could be caused by the devices -or that the complications were clinically significant; however, the dispute in the proceedings turned on the magnitude and gravity of the risks and the obligations of the respondents to disclose those risks.
Katzmann J considered reams of medical literature and detailed expert evidence on the topic of the various complications pleaded and ultimately found that the respondents had failed to adequately disclose the risks associated with the devices, in that they had not provided adequate warnings about all risks, had not provided adequate information about the possibility of the risks arising nor the seriousness of the risks.
The applicants’ case in negligence was based on the allegation that whilst each of the devices could cause several potentially serious complications, the Ethicon entitles failed to:
- undertake adequate pre or post-market evaluation of safety and efficacy of the devices; and/or
- provide adequate information about the risks associated with the use of the devices or the level of evaluation.
On the first issue, Her Honour agreed that the respondents’ pre and post market evaluation of the devices were insufficient to discharge their duty of care.
On the second issue relating to the adequacy of the information provided (although conscious of the possibility the applicants’ evidence could be tainted by hindsight) Her Honour found that, but for the respondents’ failure to warn of the pleaded potential complications and extent of evaluation, each applicant would not have consented to implantation of the device and instead would have pursued other treatment options for her condition.
As manufacturers, the Ethicon entities were found to have a duty to take reasonable care in the design, testing, evaluation, supply and marketing of the devices and that duty extended to the provision of accurate information about the performance and safety of the devices, and included the giving of warnings about contra-indications to use and potential complications thereof.
Her Honour also found this duty was not confined to the period prior the devices being made or placed on the market. The obligation to evaluate the safety of the devices and keep abreast of information about the nature and extent of potential complications was continuing, as was the obligation to provide further accurate information to patients.
Although J&J did not manufacture the devices, it was in the same corporate group as the Ethicon entities, promoted and supplied the devices to Australian doctors and hospitals and was the ‘Sponsor’ of products for the purposes of the Therapeutic Goods Act 1990 (Cth), which gave rise to an obligation to properly understand the risks associated with the use of the devices.
J&J’s duty of care did not extend to undertaking clinical evaluation of the devices but otherwise its duties were co-extensive with those of the Ethicon entities.
The fact that the medical practitioners who implanted the devices also owed their patients a duty of care was found not to absolve the Ethicon entities, (as manufacturers), from informing prospective patients (whether directly or indirectly) of the nature and extent of the potential risks associated with the devices. This meant that the respondents were required to take into account the possibility that the treating doctors might fail to inform their patients of the associated risks. Significantly, it was found that compliance with applicable regulatory requirements, was not sufficient to discharge the Ethicon entities’ duty of care.
Her Honour found the evidence established that the associated risks were not insignificant, were foreseeable, and could result in serious harm which led to the conclusion that the exercise of reasonable care would require warnings to be provided to prospective users (including the applicants and their treating doctors as well as to the hospitals to which devices were distributed) about the potential complications of the devices.
Given that the applicants made statutory claims under both the TPA and the CCA the Court also had to consider the application of the TPA and CCA to foreign corporations.
Her Honour rejected the respondents’ submission that the statutory causes of action did not apply to the two Ethicon respondents as they were incorporated overseas and neither had a place of business in Australia. This was on the basis the legislation applied to conduct engaged in within Australia by a corporation, and this condition was met because supply of the Ethicon devices took place in Australia. The devices were received in Australia by an Australian company (J&J), delivered to Australian hospitals and doctors and implanted in women in Australia.
The basis of the applicants’ claims under the TPA/CCA was threefold:
- firstly, that the devices were defective;
- second, that they were not reasonably fit for the purpose for which they were required and,
- third, that they were not of merchantable or acceptable quality.
It was common ground that if the devices were found to be defective, the second and third statutory claims would also succeed.
Her Honour was of the view that where a medical device exposes consumers to a risk of significant harm, the device will have a defect unless accompanied by warnings sufficient to alert patients to that risk.
The applicants submitted that the following circumstances should be taken into account in determining whether the Ethicon devices were defective:
- The allegation that the devices caused the pleaded complications;
- The availability of alternative forms of treatment, which were at least of comparable safety and efficacy;
- The allegation that the respondents failed to warn of the extent of clinical evaluation of the devices;
- The fact that neither condition (stress incontinence nor prolapse) was life-threatening; and
- That the device implantation surgery was elective.
In considering the question of the level of safety which a person is entitled to expect, Her Honour held that the same standard applies for medical devices intended for permanent implantation in the body as applies to a drug; that is to say, to the extent the device is known or believed to have side-effects (especially serious ones), the supplier of the device must provide medical practitioners with information or warnings sufficient to permit balanced, cautious and informed judgments to be made (see Peterson v Merck Sharpe & Dohme (Aust) Pty Ltd (2010) 184 FCR 1 at [917]).
Although Katzmann J accepted the proposition that the law does not require goods to be absolutely free from risk, she found that the safety of the devices did not meet the standard that patients are entitled to expect and accordingly decided that each device had a “defect” within the meaning of the TPA and the CCA (ACL) respectively, having regard to her findings regarding the nature and extent of the risks associated with the devices, the deficiencies of the warnings that were provided and the way in which the devices were marketed.
She went on to find that the applicants had each suffered damage that was caused by the failure to provide adequate warnings, and that the Ethicon entities and J&J were jointly and severally liable to compensate the applicants (and the other group members) who had suffered injury because of that failure.
NB. It was reported in April of this year that the respondents had lodged an appeal against the November 2019 decision of Katzmann J.
First published in the LexisNexis Australian Insurance Law Bulletin 2020 . Vol 36 No 2.
