Four Hot Areas of Medical Device Liability

Target E-mail Records

In product liability lawsuits, medical-device companies that exclude e-mail in their document retention/purging policies are courting trouble. Increasingly, discovery in litigation includes requests to review e-mail records. In some cases, e-mail contains the proverbial “smoking gun” document that allows a plaintiff to make his or her case. Such a document can include, for instance, an e-mail wherein a design engineer writes, “We need to re-work the design before a patient gets killed,” or “A recall is much more costly than simply paying the claims.” Personal injury lawyers dream about finding such documents, because they can astronomically inflate the value of a claim.

Even without any such incriminating e-mail in storage tapes or hard drives, problems abound. One reason: The cost of retrieving and reviewing e-mail archives can be so onerous that companies are compelled to settle cases rather than endure the cost and time of e-mail discovery production. The moral is, include e-mail in your corporate document management and destruction policy.

Limit Merger and Acquisition Activity

An intense pattern of merger and acquisition in the medical-device sector will come back to haunt many firms. Defense of claims from “acquired” companies can be very problematic. The medical device sector is a hothouse of brisk merger and acquisition activity and pronounced consolidation. Often, an acquired company ' its products, employees and documents ' becomes an “orphan” in a new corporate context.

When a lawsuit involves a product made by an acquired company, lawyers often find it very difficult to defend the case. Due to the acquisition, the product's original designers have left, key employees may be gone and crucial documents may be lost. Tip: Keep meticulous records on products and employees involved in acquired entities. They may help immensely in a subsequent product liability claim.

Expect More Sophisticated Attorneys

More sophisticated plaintiffs' attorneys are bringing medical product liability cases, leading to a decline in marginal cases. Fewer medical-device cases may be brought, but those emerging may be stronger and handled by a higher caliber plaintiff attorney. The watchwords seem to be, “Less quantity ' higher quality.”

Beware of Direct-to-Consumer Advertising

Such ad campaigns are increasing, and may erode the learned intermediary defense to product liability claims. Historically, drug and device companies have successfully asserted a “learned intermediary defense” against failure-to-warn claims in product liability suits. This legal doctrine holds that drug and device companies only have a duty to warn the doctor ' not the patient/consumer ' of contraindications and potential complications. This was because in the past, it was typically the doctors, not the patients themselves, who made the buying decisions on medicines and medical equipment. With the increase in direct-to-consumer ads for medications such as Claritin', Flonase' and Viagra', plaintiff attorneys may argue that this defense no longer applies, that companies have waived the defense by advertising directly to consumers. Suggestion: Have legal counsel review any direct-to-consumer ads in light of promises and warranties, and their possible effects on legal defenses to liability claims.

As part of a prudent risk management program, medical-device firms should try to peek over the horizon to assess developing trends in the law, litigation and in claim patterns. Being forewarned is being forearmed. Knowing where there are potential areas of claims may help medical device firms navigate the rocks and shoals of today's shifting tort system.

Kevin M. Quinley is Senior Vice President, Risk Services, MEDMARC Insurance Group, Chantilly, VA. He can be reached at [email protected]. Phone: 703-652-1320.

Once considered the realm of Rube Goldberg contraptions, medical technology is now a key feature of patient care. Longer life expectancy corresponds with the growth in entrepreneurial device companies making everything from tongue depressors to Jarvik-7 artificial hearts. Patients often expect perfect device performance along with flawless medical outcomes. Medical devices now comprise a multi-billion dollar industry, with vigorous growth forecast well into this century.

Accompanying such growth, however, are significant product liability risks. “Medical device” is a phrase that often evokes memories of the infamous Dalkon Shield intrauterine birth control device; faulty breast implants; or defective artificial heart valves. While product liability claims are facts of life for most manufacturers, medical device companies enjoy smaller margins of error. A pacemaker hums perfectly, or else a serious medical crisis may result. If a life-support ventilator does not function flawlessly, a patient dies or is brain-damaged.

Medical-device manufacturers increasingly find themselves targeted by ingenious personal injury attorneys pursing injury claims for aggrieved patients. Let's dust off the crystal ball and peer into the future, venturing a handful of predictions about product liability litigation against medical device companies. Here are four areas to consider in your risk-management program:

Target E-mail Records

In product liability lawsuits, medical-device companies that exclude e-mail in their document retention/purging policies are courting trouble. Increasingly, discovery in litigation includes requests to review e-mail records. In some cases, e-mail contains the proverbial “smoking gun” document that allows a plaintiff to make his or her case. Such a document can include, for instance, an e-mail wherein a design engineer writes, “We need to re-work the design before a patient gets killed,” or “A recall is much more costly than simply paying the claims.” Personal injury lawyers dream about finding such documents, because they can astronomically inflate the value of a claim.

Even without any such incriminating e-mail in storage tapes or hard drives, problems abound. One reason: The cost of retrieving and reviewing e-mail archives can be so onerous that companies are compelled to settle cases rather than endure the cost and time of e-mail discovery production. The moral is, include e-mail in your corporate document management and destruction policy.

Limit Merger and Acquisition Activity

An intense pattern of merger and acquisition in the medical-device sector will come back to haunt many firms. Defense of claims from “acquired” companies can be very problematic. The medical device sector is a hothouse of brisk merger and acquisition activity and pronounced consolidation. Often, an acquired company ' its products, employees and documents ' becomes an “orphan” in a new corporate context.

When a lawsuit involves a product made by an acquired company, lawyers often find it very difficult to defend the case. Due to the acquisition, the product's original designers have left, key employees may be gone and crucial documents may be lost. Tip: Keep meticulous records on products and employees involved in acquired entities. They may help immensely in a subsequent product liability claim.

Expect More Sophisticated Attorneys

More sophisticated plaintiffs' attorneys are bringing medical product liability cases, leading to a decline in marginal cases. Fewer medical-device cases may be brought, but those emerging may be stronger and handled by a higher caliber plaintiff attorney. The watchwords seem to be, “Less quantity ' higher quality.”

Beware of Direct-to-Consumer Advertising

Such ad campaigns are increasing, and may erode the learned intermediary defense to product liability claims. Historically, drug and device companies have successfully asserted a “learned intermediary defense” against failure-to-warn claims in product liability suits. This legal doctrine holds that drug and device companies only have a duty to warn the doctor ' not the patient/consumer ' of contraindications and potential complications. This was because in the past, it was typically the doctors, not the patients themselves, who made the buying decisions on medicines and medical equipment. With the increase in direct-to-consumer ads for medications such as Claritin', Flonase' and Viagra', plaintiff attorneys may argue that this defense no longer applies, that companies have waived the defense by advertising directly to consumers. Suggestion: Have legal counsel review any direct-to-consumer ads in light of promises and warranties, and their possible effects on legal defenses to liability claims.

As part of a prudent risk management program, medical-device firms should try to peek over the horizon to assess developing trends in the law, litigation and in claim patterns. Being forewarned is being forearmed. Knowing where there are potential areas of claims may help medical device firms navigate the rocks and shoals of today's shifting tort system.

Kevin M. Quinley is Senior Vice President, Risk Services, MEDMARC Insurance Group, Chantilly, VA. He can be reached at [email protected]. Phone: 703-652-1320.