In brief

• In an unanimous decision, the Full Court dismissed all 17 grounds of appeal by Ethicon Sarl against the decision of Katzmann J in Gill v Ethicon Sarl (No 5) [2019] FCA 1905, regarding nine gynaecological medical devices.
• The decision highlights the requirement for manufacturers to disclose and properly warn users of any known risks associated with medical devices.
• While intermediaries such as medical practitioners may affect the standard of care owed by manufacturers regarding warnings, it does not allow manufacturers to avoid liability if those intermediaries are themselves not informed of the risks of the devices that are known to the manufacturer.

Background

This decision is an appeal of the primary judgment of Katzmann J in Gill v Ethicon Sarl (No 5) [2019] FCA 1905, who found that nine of Johnson & Johnson’s transvaginal mesh products marketed in Australia did not meet the standard of safety patients are generally entitled to expect, that each device had a defect (or a safety defect), and the applicants were entitled to compensation and damages for harm arising from the devices. The primary judge also found for the applicants on the ground of negligence, finding that the respondents breached their duty of care to the applicants by failing to conduct appropriate pre- and post-market clinical testing of the devices and for failing to warn of the risks of the devices.

You can read our original article on the primary judgment here.

Key issues in the appeal

At trial, Ethicon Sarl and related companies (the Appellants) (the respondents in that proceeding) had argued that the devices did not cause the pleaded complications. However, following cross examination of Dr Hinoul, a representative of Ethicon Sarl, it was conceded that ‘not only did the pleaded complications exist, but at all relevant times they were known by the appellants to exist. Moreover, they were all clinically significant’.^[1]

In the appeal, in what was described by the Full Court of the Federal Court of Australia (Full Court) as a ‘volte-face forced upon the appellants by a witness telling the truth in cross-examination’^[2] the Appellants submitted that the pleaded complications were known (or could be known) not only by themselves but also by pelvic surgeons who themselves owed a duty to patients to warn of risks. Therefore the manufacturer was not required to provide detailed warnings. In the alternative, the Appellants submitted that the respondents (the applicants in the original proceeding) had not established that the complications were not known to pelvic surgeons.

Confirmed liability under the Trade Practices Act

The Full Court upheld the primary judge’s decision that the Appellants had contravened provisions of the Trade Practices Act 1974 (Cth) by supplying devices with a ‘defect’ in that the devices did not meet the standards of safety a patient was generally entitled to expect. The Full Court further upheld the primary judge’s decision that the devices were not of merchantable quality and not fit for purpose.

The Full Court followed the decision of Merck Sharp & Dohme (Australia) Pty Ltd v Peterson [2011] FCAFC 128, finding that a good may be considered defective if there is a known risk regarding the safety of the good and there no information, advice or warning available about that risk. It is sufficient if that risk affects some people, and the risk to the users’ safety does not need to be high to constitute a defect.

While goods do not need to be absolutely free from risk, the level of safety required is that which the community is entitled to expect, which is an objective test.^[3] It was highlighted that patients generally are entitled to expect that medical devices supplied to doctors and hospitals do not present a risk of injury. If they do present a risk, then patients are generally entitled to expect that the manufacturer will provide appropriate warnings about those risks to medical practitioners.^[4]

Misleading or deceptive conduct

The Full Court agreed with the primary judge’s finding that the conduct of the Appellants in marketing the devices was likely to mislead or deceive, or was misleading or deceptive. This is because the instructional and promotional material published by the Appellants omitted warnings about the pleaded complications and the severity of the risks. The Full Court found that some information was inaccurate and at times false representations were made,^[5] such as that the inflammatory response to the implanted device was ‘transient’ rather than permanent.

Negligence: breach of duty to warn of risks and duty to conduct clinical testing

The Full Court upheld the primary judge’s decision that the Appellants were liable in negligence for breaching their duty of care to warn patients of the risks associated with the devices, and for breaching their duty of care by failing to conduct appropriate pre- and post-market clinical testing to determine the safety of the products.

The Full Court found that the Appellants had failed to warn of the risks of the devices, and those risks should have been disclosed in the devices’ instructions for use. Informing users of risks means disclosing both the probability and severity of harm. It is not sufficient to merely inform users of a possible harm.^[6]

The Appellants contended that they did not need to provide detailed warnings of the kind determined by the Court, as the surgeons using the devices would be aware of the risks or were able to discover the risks for themselves from the medical literature. This argument was rejected by the Full Court.^[7] While the Court agreed that it may be sufficient to warn surgeons of known risks, rather than patients directly, it was clear that in this case that the pelvic surgeons were generally not aware of the risks. In addition, the surgeons should be able to assume that the instructions for use with the devices would reflect the manufacturer’s knowledge of the risk of the devices.^[8] Appropriate and fulsome warnings of known risks are required so that the medical practitioners can make a ‘balanced, cautious and informed judgment about whether to recommend the device’.^[9]

The Full Court agreed that the fact that the devices are supplied to patients from their surgeons may affect the standard of care owed by the manufacturers. They acknowledged that the surgeons have the professional training, experience and knowledge and owe a duty of care to their patients to exercise skill and competence and to warn of risks. However, the duty of care owed by the surgeons does not permit the Appellants to avoid their own duty of care in relation to the safety of their devices and warnings of risk. This is particularly the case where the risks were known to the Appellants but appropriate warnings were not given and, as was established during the trial, were generally not known by the surgeons until their own patients began to report the complications.^[10]

The Full Court also upheld the primary judge’s decision that the Appellants breached their duty of care by failing to conduct adequate and robust pre- and post-market testing of the devices. The Full Court found no error with the primary judge’s reliance on the Appellant’s failure to conform with the European regulatory regime in applying a European Conformity Mark (CE mark) as evidence of their failure to meet the requisite duty of care. Evidence showed that Appellants pre- and post-market testing was inadequate and, if not for the Appellant’s negligence, the devices would have never been on the market.

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