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Supreme Court sends defective vaccine case into impasse

26 May 2010

Lawyers for an eleven-year old child who claims he has suffered brain damage as a result of a defective vaccine have been left to ponder over the exact implications of the Supreme Court ruling in the case.

Paul Balen, a partner at Freeth Cartwright, has been acting for the claimant and said the ruling has left lawyers “baffled”.

Declan O’Byrne was given two doses of an anti-meningitis vaccine manufactured by French pharmaceutical giant Aventis Pasteur SA and distributed in Britain through its UK subsidiary, Aventis Pasteur MSD.

The boy’s family initially brought proceedings against the subsidiary within the strict ten-year timeframe set by the EU’s product liability directive.

The distributor retorted that it was not the correct defendant and that the claimant should instead sue the parent company as the manufacturer of the drug.

By the time this defence was put up however, the claim against the manufacturer was time-barred.

The claimant secured a substitution of defendant in the Court of Appeal but, after two references to the European Court of Justice, the Supreme Court has now ruled in O’Byrne v Aventis Pasteur [2010] UKSC 23 that this substitution was not allowed under the directive.

In its most recent ruling in the case, the European court held that substitution was contrary to the directive if it resulted in allowing the claimant to sue the producer outside the limitation period.

It left open the possibility to substitute the parent for the subsidiary where the parent company which manufactured the product determined when it was put into circulation – though only if proceedings against the subsidiary had already been brought within the ten-year limitation period.

Looking at the European court’s ruling, Lord Rodger said the parent-subsidiary relationship was only one factor to consider when identifying the entity controlling the putting into circulation of the product.

“The fact that [the subsidiary] was a wholly-owned subsidiary was simply one – by no means decisive – factor to be taken into account by domestic courts when assessing how closely the subsidiary was involved with its parent’s business as […] a producer”, he said.

“All the circumstances would have to be taken into account”, he continued. “If [the parent company] was indeed in a position to decide when the product was to be distributed, then [the subsidiary] would be integrated into the manufacturing process and so tightly controlled by [the parent] that proceedings against [the subsidiary] could properly be regarded as proceedings against the parent”.

Discussing the European court’s earlier ruling, SJ regular Paul Stanley QC suggested it allowed the distributor of the vaccine to be treated as a supplier that failed to identify the manufacturer within a reasonable time, which was then deemed to be a ‘producer’ under the directive and the correct defendant.

Stanley also said it remained open to the national court to assess whether the putting into circulation of the product in question was, in fact, determined by the parent company which manufactured it, and that the time limit was effectively paused against the producer.

The Supreme Court ruling however suggests that neither interpretation applied in the O’Byrne case. While accepting the possibility of substitution, the court decided the parent company and its subsidiary could not be regarded as one and the same in this case.

Paul Balen added that the only certainty in the justices’ decision was that “the old authorities on substitution are gone”, and that the only opening left to argue was the point on wholly-owned subsidiaries.

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