PIP implants – territorial limit in liability policy not susceptible to challenge on the basis of discrimination

In an earlier post in February we noted that the Advocate-General assigned to the RB v TÜV Rheinland case had advised that the restriction, in a liability policy issued to the manufacturer of silicone implants, of cover to damage sustained in France did not engage the principle of non-discrimination on the grounds of nationality set out in the European Treaty. The discrimination had been alleged by a patient who had implants inserted, and thus sustained damage, in Germany. In its judgment of 11 June the CJEU endorsed the AG’s view and provided further guidance.

The first key element of the Court’s decision is that although European law governs safety standards for medical devices, it does not currently regulate either the civil liability of manufacturers or their associated insurance arrangements. The Court pointed out the very obvious difference from motor insurance, observing that “insurance covering the civil liability of manufacturers of medical devices with respect to harm linked to those devices is not the subject of regulation by EU law, unlike, for example, the area of civil liability insurance in respect of the use of motor vehicles, which is regulated by Directive 2009/103/EC”.

The second was to assess whether any of the fundamental freedoms were nevertheless engaged such that non-discrimination might be triggered. It found that none was for the following reasons. Free movement of persons did not arise as the patient had the implants inserted in her home state, freedom to provide (medical) services was not engaged for the same reason and also because the insurance contract was between two entities from the same member state (France) and free movement of goods was not at issue because the dispute related not to the cross-border movement of the implants but to the harm they caused.

The result is that the injured patient’s attempt to strike down the territorial limits clause in the policy failed, with the likely outcome being that she will go uncompensated. It is not the function of the Court or the AG to express views on whether this seems a harsh result pointing to a need for reform, so we will need to draw our own conclusions about that.

12 KBW drew a comparison between the decision in RB and the recent English High Court decision Hutchinson v Mapfre in a blog published on 11 June. In that case, as we reported at the time, the judge rejected reliance on a territorial limits clause in an insurance policy on the basis that the clause “would drive a coach and horses through the special rules on insurance laid down [in Chapter II of the Brussels I regulation and] would provide every liability insurer … with the simplest means of depriving the injured party of the choice of additional jurisdictions [in the regulation]”. As 12 KBW points out, the present case is very different indeed in that questions of jurisdiction were simply not at issue and, perhaps most importantly, that the claimant in RB remained in her home state at all times whereas Hutchinson involved an English claimant who was seriously injured in Spain.


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Written by Alistair Kinley, Director of Policy and Government Affairs at BLM

alistair.kinley@blmlaw.com

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