Product liability in Italy: Between uncertainties and established principles

Introduction

Even after the implementation in Italy of Directive 85/374/EEC (“EU Product Liability Directive”), whose provisions were eventually incorporated in the Legislative Decree no. 206/2005 (“Consumer Code”), the Italian courts have decided a large number of product liability cases concerning pharmaceutical products on the basis of the liability regimes provided for under the Italian Civil Code (“ICC”).¹

Until today, only few decisions have expressly excluded (on slightly different grounds) the applicability of the provisions contained in the ICC to cases involving pharmaceutical manufacturers’ liability for allegedly defective drugs. ²

The issue has been addressed again recently, this time in a questionable decision by the Supreme Court of Cassation published in March 2019³. The Court, contradicting the principle boldly stated by some lower courts, ruled that the liability regime provided for under the Consumer Code does not exclude the applicability of Article 2050 ICC. On the other hand, the Court reaffirmed the principle that adequate disclosure of the risks relating to the side-effects will exempt both the manufacturer and the distributor of the product from any liability.

Case history in a nutshell

In July 2006, a patient had sued before the Court of Bergamo a leading pharmaceutical company claiming compensation for damages suffered as a consequence of a severe skin disease (i.e. toxic epidermal necrosis, also known as Lyell’s syndrome) allegedly caused by the intake of an antibiotic drug.

In his writ of summons, the plaintiff asserted the liability of the defendant pursuant to Article 2050 ICC, by qualifying the manufacture and sale of pharmaceutical products as “dangerous activity”. ⁴
The Court of Bergamo, after an in-depth technical assessment – during which causation between the drug intake and the onset of the disease had been indisputably ascertained –, rejected the plaintiff’s claim, therefore exempting both the manufacturer and the distributor from any liability, on the following grounds:

• drug manufacturers’ liability should not be categorised as liability for the exercise of dangerous activities, which is governed by Article 2050 ICC, but rather as manufacturer’s liability, regulated by Articles 114 et seq. of the Consumer Code; and
• in any event, disclosure by the manufacturer in the product’s leaflet of the risk of Lyell’s syndrome associated with the intake of the drug was objectively the only measure that could have been taken by the manufacturer.⁵
The plaintiff had appealed the above decision before the Court of Appeal of Brescia, which, overruling the first instance decision:
• excluded the applicability of the Consumer Code’s provisions, arguing that the drug at issue could not be considered as a defective product, and decided the case on the basis of the liability regime provided for under Article 2050 ICC (thereby qualifying as dangerous the activities of manufacture and distribution of pharmaceutical products); and
• upheld the plaintiff’s claims on grounds that the defendant would have failed to prove to have adopted all suitable measures to avoid the damage. In particular, the Court of second instance ruled that, where the adverse event is a consequence of a known side-effect whose exact aetiology is still unknown (as in the case of the Lyell’s syndrome) disclosure by the manufacturer of the low risk relating to the side-effects would not be sufficient to exempt the manufacturer and the distributor of the product from any liability, as the patient would not be in the position to thoroughly assess the risks associated with the intake of the drug.
In its reasoning, quite surprisingly, the Court also argued that, in such cases, the drug manufacturer can only choose between giving up manufacture and marketing of the product or taking on the economic risk connected to possible damage compensations. ⁶
The above decision was appealed before the Supreme Court of Cassation.

The decision of the Supreme Court of Cassation

The first issue addressed by the Supreme Court in its decision no. 6587 of 7 March 2019 concerned the legal regime applicable to the liability of manufacturers of pharmaceutical products.

From a drug manufacturer perspective, the application of the liability regime under Article 2050 ICC (as opposed to the application of the liability provisions under the Consumer Code) has crucial implications in terms of (i) limitation period: the Consumer Code provides for a three-year limitation period, as opposed to the five-year limitation period under the ICC, and (ii) burden of proof: the Consumer Code imposes on the plaintiff a more stringent burden of proof of the product’s defect, while, according to Article 2050 ICC, the plaintiff needs only to prove causation between the activity performed by the defendant and the alleged damage, whereas the defendant, in order to be exempted from liability, must prove that all adequate measures were taken to avoid the damage.

In this regard, the Supreme Court, adhering to the position taken on this point by the Court of Appeal, ruled that the liability regime provided for under the Consumer Code does not exclude the applicability of Article 2050 ICC, that must be held as a provision having a different rationale as well as a different scope of application.

On the other hand, the Court, overruling the decision of the Court of Appeal of Brescia, clarified that, subject to compliance with all the laws and regulations governing the testing, manufacturing and marketing of pharmaceutical products, where the adverse event is a consequence of known side-effect whose exact aetiology is still unknown, adequate disclosure by the manufacturer of low risk relating to the side-effects will exempt both the manufacturer and the distributor of the product from any liability.

Conclusive remarks

The decision issued by the Supreme Court is important as it reinforces the principle set out by the earlier Court of Bergamo decision that pharmaceutical companies cannot be held liable for damages in relation to side-effects promptly and comprehensively disclosed in the product leaflet.

However, at the same time, the decision at hand may be viewed as a missed opportunity for consolidating the trend that have begun from lower courts, which seemed to lead to a future application – on an exclusive basis – of the product liability regime under the Consumer Code to cases involving pharmaceutical products. Quite to the contrary, the decision contributes to generate uncertainty about the liability regime applicable to damage caused by medicinal products, hindering the achievement of the objective set by the EU Product Liability Directive, whose intended purpose was to prevent this sort of tension by promoting maximal harmonization, based on the principles of article 100 of the EEC Treaty (now article 94 EC Treaty).

Finally, the decision also seems to stand in contrast with the principles affirmed by the European Court of Justice, which, in its decision of 21 June 2017 (Case C-621/15), clarified – inter alia – that, in product liability cases, national courts may not apply evidence systems provided by domestic rules (such as the system provided by article 2050 ICC) “in such a way that in practice they introduce, to the detriment of the producer, unjustified presumptions liable to infringe Article 4 of Directive 85/374 or even undermine the very effectiveness of the substantive rules laid down in that directive”.

¹The ICC disciplines several torts that may be relevant, and have been applied in the past, to remedy product liability cases, including cases involving pharmaceutical products. Reference is made, in particular, to Article 2043 ICC, which sets forth the general tort liability regime, and to Article 2050 ICC, which provides for specific liability rules for damages caused by dangerous activity.
²See decision of the Court of Sassari, 12 July 2012 and decision of the Court of Bergamo, 23 November 2013 (according to which cases involving liability for damages caused by pharmaceutical products must be decided in accordance with the Consumer Code’s provisions governing the non-contractual liability of manufacturers); see decision of the Court of Palermo, 14 November 2017 (which specified, inter alia, that the fact that the dangerousness does not relate to the drug manufacturing process nor to the intrinsic dangerousness of its active ingredient, but rather to the side effects that the product - under certain circumstances - may generate in those who take it, prevents the applicability of the rules set forth by Article 2050 ICC); and see decision of the Court of Turin, 9 April 2018 (which affirmed the principle that national courts may not apply a liability regime that violates the burden of proof established by Article 4 of the EU Product Liability Directive).
³Decision of the Supreme Court of Cassation, third division, no. 6587 of 7 March 2019.
⁴Article 2050 ICC reads: “Whoever causes injury to another in the performance of an activity dangerous in its nature or by reason of the instrumentalities employed, is liable for damages unless he proves that he has taken all suitable measures to avoid the injury”.
⁵See decision of the Court of Bergamo, 23 November 2013, which also specified that the Consumer Code’s provisions must be held as lex specialis – therefore prevailing on the lex generalis (i.e. the ICC tort liability provisions) – and applied on an exclusive basis to cases involving the manufacture and distribution of allegedly defective drugs.
⁶See decision of the Court of Appeal of Brescia no. 325 of 3 March 2017.