New medical device regulations: what liability do notified bodies face?

Introduction
Case law
Comment

Introduction

Under the EU Medical Device Regulation and the EU In Vitro Diagnostic Medical Device Regulation, organisations that want be recognised as notified bodies must obtain a new designation in line with the regulations' requirements. This is a very long and complex process. What is the risk of liability for notified bodies that fail to obtain the new designation within the required time limit?

The new regulations introduce, among other things, more stringent requirements for 'notified bodies' (ie, bodies responsible for assessing and issuing certificates of conformity necessary for placing devices on the market).

EU member states will have to supervise the designation and monitoring of notified bodies more closely and notified bodies will have to go through a long and complex procedure to obtain the new accreditation, which can take from 18 to 20 months.

According to data recently released by Assobiomedica (the association of medical device suppliers), the number of notified bodies in Italy that have applied for designation under the EU Medical Device Regulation and the EU In Vitro Diagnostic Medical Device Regulation is low (ie, 21 out of 58 for medical devices and seven out of 22 for in vitro diagnostic medical devices). The first designations are expected in 2019, less than one year before the EU Medical Device Regulation becomes fully applicable. Notified bodies that are re-designated may therefore be unable to properly handle the workload resulting from the large number of products to be certified under the new legislation (including products already on the market, products on the market that will require supervision for the first time (eg, 85% of all in vitro diagnostic medical devices) and new and innovative products).

Considering, on the one hand, the complex process required to obtain the new designation and, on the other, the growing demand for services from notified bodies, there is a real risk that some notified bodies will be unable to obtain designation under the EU Medical Device Regulation and EU In Vitro Diagnostic Medical Device Regulation or that, if re-accredited, they will be unable to cope with the increased workload.

It is therefore easy to understand the concern, recently expressed by Assobiomedica,(1) that the placement of products on the market within a reasonable time limit and therefore patients' access to such products may be seriously jeopardised. Several players are calling for an interruption of the transitional period for both sets of regulations or for an extension of the deadline for their implementation (26 May 2020 for the EU Medical Device Regulation and 26 May 2022 for the EU In Vitro Diagnostic Medical Device Regulation) for all products or for only products already on the market. Considering the long and troubled process that led to the adoption of the regulations and the current delicate European political situation, it is very unlikely that the EU legislature will revise the regulations.

The question arises of what will happen if notified bodies fail to obtain the new designation on time or are unable to meet manufacturers' requests, and what liability will they face regarding manufacturers and patients?

Case law

The European Court of Justice recently ruled on the issue of the liability of notified bodies under the EU Medical Devices Directive (93/42/EC). In its judgment of 16 February 2017 (Case C-219/15), the court ruled that the breach by the notified body of its obligations under the directive may give rise to liability towards the end users of medical devices, in compliance with the relevant provisions of domestic law.

In Italy there are very few case law precedents on the third-party liability of notified bodies, and none of which concerns the certification of medical devices. The only decision that established liability of a notified body towards the manufacturer due to non-compliance with its duties was handed down by the Court of Piacenza in 2012, and raises some interesting points as to whether, and to what extent, the failed or delayed designation of the notified body under the new legislation may give rise to liability on the part of such body.

Although the case submitted to the Court of Piacenza regarded inaccuracy of the certification, the principle laid down in this decision – that the notified body has the burden to prove that such non-compliance was due to unforeseeable circumstances for which it is not responsible – could also apply in the case of the withdrawal, restriction or suspension of certificates resulting from the failed or delayed designation of the body under the new legislation. In this case, it may not be easy for a notified body which has not obtained the new designation within the required time limit to claim that the withdrawal of the issued certificates was not attributable to it. Similarly, the increased workload faced by the few notified bodies that will have obtained the new designation could jeopardise the quality of the services that they provide and increase the risk of non-compliance with the duties undertaken via-à-vis manufacturers and of liability arising towards patients affected by such non-compliance.

The Court of Piacenza decision also addresses the additional issue of compulsory insurance coverage against third-party liability under the relevant legislation. Annex VII of both regulations requires notified bodies to take out adequate insurance for conformity assessment activities, the scope and financial value of which correspond to the level and geographical scope of the notified body's activities and are proportional to the risk profile of the devices certified by the notified body. However, the regulations contain no detailed provision setting out the minimum requirements for compulsory insurance contracts and their mechanism of operation (eg, whether a third party damaged by incorrect certification or by the withdrawal, suspension or restriction of certifications is entitled to take direct action against the insurer).

Comment

Although the Italian regulatory framework and case law offer little precedent for assessing the risks of possible liability for notified bodies vis-à-vis manufacturers and third parties, given the complexity of the re-designation procedure it is essential that all economic players take action as soon as possible to comply with these requirements. Assobiomedica's initiative to prompt companies to obtain updated information on the accreditation of notified bodies in order to identify the most appropriate type for them – bearing in mind that there are no exemptions in terms of conformity for products that have been on the market for some time or for new technologies – is welcome.

For further information on this topic please contact Christian Di Mauro or Riccardo Fruscalzo at Hogan Lovells Studio Legale by telephone (+39 02 7202 521) or email (christian.dimauro@hoganlovells.com or riccardo.fruscalzo@hoganlovells.com). The Hogan Lovells Studio Legale website can be accessed at www.hoganlovells.com.

Endnotes

(1) Vincenza Ricciardi, "European Regulations on Devices: Assobiomedica would like to stop the countdown", About Pharma, November 2018.