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Ethicon 5/23
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Product Liability Defence 2016: Trends
May 23, 2016 | Who's Who Legal
...With multiple manufacturers currently facing claims and trials, work stemming from these matters is expected to continue for the time being. Johnson & Johnson – Ethicon are currently facing the highest number of federal suits in relation to pelvic mesh complications, with competitor C R Bard forced to pay out $200 million in mid-2015 to settle around 3,000 cases. -
The harm done by Big Business worldwide is epic: Olive
May 20, 2016 | The Star
By David Olive
...That doesn’t include a $2.2 billion fine for J&J’s improper marketing of Risperdal, an anti-psychotic drug, to children and the elderly. Or a settlement of almost $3 billion to resolve lawsuits over its artificial hips and faulty vaginal mesh inserts -
Endo’s AMS claims pelvic mesh plaintiffs scammed into needless explantation surgeries
May 20, 2016 | Mass Device
By Brad Perriello
Endo International (NSDQ:ENDP) subsidiary American Medical Systems Holdings repoortedly accused “a pyramid of businessmen, doctors and lawyers” of convincing women to undergo unnecessary surgeries to remove pelvic mesh implants and inflate their damage claims.
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Product Liability Defence 2016: Trends
May 23, 2016 | Who's Who Legal
The main challenge affecting product liability lawyers today is cost. Clients on both sides of the bar remain conscious of legal fees, with the lack of available funding hitting parts of the plaintiff bar hard and changing the way in which cases are put together and handled. New technology liabilities have been identified as the next big source of work: it’s not known exactly how cases involving 3D printers and driverless cars will be handled. Medical device and pharma cases are still a steady source of work, while regulatory lawyers have seen an increase in compliance-based work. Many of the issues that affected the sector last year are still present, and the addition of new trends in the coming year is likely to see practitioners enjoying an active market.
Funding and Class Actions
The funding of litigation cases and the rise in alternative fee arrangements and structuring has been a major topic during this year’s research. It is noted that even in the US, where funding is generally more readily available than in other jurisdictions, lawyers have commented on a rise in cost-consciousness on both sides of the bar. In the UK and Europe, the lack of legal aid means that most cases “never get off the ground”, with only the biggest cases able to gain backing from private investors. On the defendant side, alternative fee arrangements are becoming the norm, with many practitioners stating that “the days of billable hours are almost gone” and designing new fee structures to suit clients is the new norm. This cost-consciousness has also led to a rise in alternative dispute resolution, with clients increasingly on the lookout for ways to avoid costly litigation. Arbitration clauses are more common as practitioners – particularly outside the US – expect the use of these, along with mediation, to take the place of all but the highest-profile liability cases over the next 10 years.
There has also been a notable rise in the number of consolidated class actions in the US, merging what would have previously been multiple cases across different states into a single multi-district proceeding. This has particularly been seen in recent pelvic mesh litigation, with over 80,000 cases being combined into multi-district proceedings. This new strategy, aiming to save both costs and time, limits the number of lawyers involved. From a client standpoint this could be seen as a real bonus, dramatically cutting their outlay on legal counsel; for lawyers on both sides of the dispute, however, it means an increasingly competitive marketplace as lawyers chase fewer roles in cases. The change in strategy has a more marked impact on defendants to product liability actions: fighting a single case, rather than multiple smaller actions, leads to a “winner takes all” scenario, where the stakes are much higher than in normal proceedings. The result has been a “flight to quality” as defendants seek the best legal counsel they can find, with some even putting together “dream teams” from multiple firms or jurisdictions, to best defend their position.
Practitioners also noted that the shift towards larger class actions appears symptomatic of the ease with which plaintiffs and their lawyers can now find others who have been similarly affected by a product. This is in large part down to the growth of social media, which makes it far easier for those in a similar situation to connect with one another and, subsequently, with legal counsel. Although this trend has to some extent been seen in Europe and elsewhere as well, the contrast to the US in terms of availability of funding means that it has had less of an impact on these markets.Life Sciences
Pharmaceutical and medical devices still provide lawyers with a steady stream of work, with a pre-emptive ruling case at the end of 2015 expected to have an impact on pharma cases going forward. Following a sixth circuit judge’s ruling that design defect claims are pre-empted by federal law in most instances, it is expected a number of other similar cases will be fought in the wake of this decision.
Despite some reports that litigation numbers are dropping due to the difficulties around funding, it was noted that medical device litigation is still well funded, with backers expressing confidence in the “tried and tested” nature of such cases. Those outside the US have also commented on new sources of funding, with venture capitalists more called-upon than in previous years: a trend that is expected to continue. As the UK and European product liability markets seem to follow on from major issues in the US, these investors’ decisions over what to back are frequently informed by prominent cases that have been successful in US courts.
One of the highest-profile cases in this regard relates to pelvic meshes, and is expected to keep lawyers busy into the coming year. With multiple manufacturers currently facing claims and trials, work stemming from these matters is expected to continue for the time being. Johnson & Johnson – Ethicon are currently facing the highest number of federal suits in relation to pelvic mesh complications, with competitor C R Bard forced to pay out $200 million in mid-2015 to settle around 3,000 cases. This only settled around a fifth of the suits, however, highlighting the amount of work that remains.
Despite the seemingly buoyant disputes market in the sector, there has been a high level of deal activity lately, which has had a marked effect on the legal marketplace. One of the largest proposed deals was Pfizer’s merger with Allergan, which would have been the largest merger in the sector to date; however, this was abandoned in April 2016 amid plans to change US tax laws. The spate of mergers and consolidations has seen the market shrink in terms of potential clients for lawyers. This, combined with continued cost-consciousness and a preference for alternative dispute resolution over traditional litigation, is a cause for concern for some. The trend is expected to continue for the next five years or more, with some practitioners putting the shift down to a “cyclical market”, while others predict this could be a more definite departure from the “product liability market of old”.New Trends
New technologies are noted as the “next big thing” in product liability, with cases involving 3D printers, driverless cars and drones expected to “skyrocket” in the coming years. In the case of 3D printing especially, it has been suggested that current laws and regulations are not suitable to cover potential cases. Who is liable for different issues is still fairly unclear, with the blame for product faults potentially attributable to printer manufacturers, modelling software designers or those using the printer. There are also many questions surrounding product testing standards, with no set rules currently governing the production or sale of software and goods. One practitioner stated, “Until there is a benchmarking case tried, there remains a lot of uncertainty in the 3D printing sphere.” It is expected that heavier regulations will be introduced over the next year. With 3D printers now used for medical procedures and treatments, these types of cases will likely become a major source of work over the next decade.
Another “hot topic” for the future is food liability cases, with food labelling matters expected to see the most activity in coming years. Many practitioners we spoke with pointed to growing interest from the plaintiff bar on food-related matters, following several 2015 cases concerning mis-sold and misrepresented products across the US. It is widely believed that, following several successful class actions, “the floodgates will open” to more food cases, and that it is “only a matter of time” before this becomes a major source of work.Regulatory Action
Practitioners also reported on a rise in regulatory activity over the past 12 months, with the emphasis now on ensuring compliance for clients. The European Parliament is in the process of finalising a new medical devices regulation, which is likely to introduce additional pre-market scrutiny of higher-risk medical devices. Existing exemption for “in-house” devices that are manufactured and used within the same health institution will probably be removed, leading to large amounts of work for regulatory lawyers and their clients. The US Food and Drug Administration is also seen to be increasingly vigilant of manufacturers, and there’s no sign of this changing anytime soon. Some see this as a reaction to the impending emergence of new technology cases in the market, with regulators hoping to clamp down on legislation to help prevent an insurmountable number of cases. In a response to this new trend, firms have started marketing product safety and risk-management teams, offering clients a “comprehensive compliance service” to ensure that they are not exposed to potential future liabilities. Following the death of a participant in a French clinical trial, in February 2016, European practitioners are anticipating new restrictions on such trials, with more scrutiny on the safety of drugs and suitability of volunteers.
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With consolidation in the market, both in terms of client mergers and multi-district class actions in the US, the coming year is likely to be a more competitive one for firms. The cost-consciousness of clients and the move towards alternative dispute resolution are both expected to continue into 2017, with lawyers persistently adapting to these changes. The steady stream of pharmaceutical and medical device work, and new cases stemming from new technologies, will also keep the market busy. Despite potential issues, practitioners are optimistic for the coming year.
http://whoswholegal.com/news/analysis/article/33142/product-liability-defence-2016-trends/
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The harm done by Big Business worldwide is epic: Olive
May 20, 2016 | The Star
By David Olive
One of the oldest documents in humanity is the Hammurabi Code, dating from 1754 BC. It contains no fewer than 282 laws. Such was the epidemic of anti-social behaviour by people engaged in commerce that the Babylonian king was obliged to engrave in stone his punishments for makers of shoddy goods, builders of homes that fell down, traders that cheated each other, and grain merchants who fixed prices in conspiracies against the public.
The punishments were harsh. They included execution, the severing of one’s hands, and fines that condemned a perpetrator to a lifetime of penury and disgrace.
So, looking at today’s police blotter of corporate crimes, proved and alleged, how are we doing 3,770 years later?
Hmm… Not so well.
Johnson & Johnson Inc., maker of Tylenol, Band-Aids and heart stents, is currently accused by more than 1,000 women in the U.S. of failing to warn consumers that its Johnson & Johnson’s Baby Powder has been linked to ovarian cancer. J&J insists that “the overwhelming body of scientific research and clinical evidence supports the safety of cosmetic risk.”
That kind of trouble is the norm for J&J, which since 2013 alone has paid an astonishing $5 billion (U.S.) to settle legal claims over the safety and efficacy of its products. (All figures in U.S. dollars.) That doesn’t include a $2.2 billion fine for J&J’s improper marketing of Risperdal, an anti-psychotic drug, to children and the elderly. Or a settlement of almost $3 billion to resolve lawsuits over its artificial hips and faulty vaginal mesh inserts. In 2010, the U.S. government shut down a J&J plant in Pennsylvania whose bottles of J&J Infant Tylenol were contaminated with particles of nickel and chromium.
Today’s police blotter also shows that Montreal engineering giant SNC-Lavalin Group Inc. might have used $16.8 million in bribes disguised as commissions to crack the Algerian market, according to a Toronto Star-CBC analysis of the Panama Papers.
SNC is already in hot water over alleged bribes elsewhere so troubling that the UN has forbidden SNC from bidding on UN-funded contracts.
Elsewhere, Apple Inc. stooped to conspiring with other e-book publishers to fix prices at consumers’ expense. Now it must pay a $450-million fine for violating U.S. anti-trust laws.
Goldman Sachs Group Inc., the U.S. banking giant, has agreed to pay Uncle Sam a $5-billion fine for selling financial products it knew to be shoddy. The U.S. feds have already reached settlements with the Wall Street malefactors JPMorgan Chase (a $13-billion settlement), Bank of America Corp. ($16.6 billion), Citigroup Inc. ($7 billion) and Morgan Stanley ($3.2 billion).
The sum total of the above fines is $45 billion, a mere “cost of doing business” relative to the estimated $22 trillion in damage to the U.S. economy caused by the Luciferian architects of the Great Recession.
Elsewhere on the police blotter, a Volkswagen AG mired in “dieselgate” has just paid 12 current and former members of its supervisory board a total of $72.4 million in bonuses for 2015. That’s their reward for failing to put a halt to the decade-long VW scheme to fake the stated fuel-efficiency performance of VW vehicles. The world’s second-largest automaker is now flirting with insolvency from the resulting fines and class-action suits.
Conditions at VW are dire enough that it might seek a government bailout. But that will have to occur with German Finance Minister Wolfgang Schaeuble out of the room. Reflecting popular German sentiment about VW, Schaeuble has said: “I have no sympathy for managers who first drive a large blue-chip company into an existence-threatening crisis and then defend their bonuses in a public debate.”
General Motors Corp. faces 235 pending injury and death lawsuits over a faulty ignition switch that is so far linked to about 400 deaths and injuries. GM has acknowledged that employees whose identities it won’t disclose knew of trouble with the ignition switch for a decade or more.
Finally, we have Reckitt Benckiser Group PLC (RB), the giant British maker of a cupboard full of household brands, including French’s mustard, Lysol, Woolite, Scholl, Durex condoms, Air Wick air fresheners and scores of other products sold in close to 200 countries.
RB was in public denial for years about its humidifier disinfectant for the South Korean market, keeping it on the shelves for a decade 2011, when four pregnant women were found to have died from inhaling toxic chemicals in the disinfectant. So far, this RD product appears to have killed 146 people. Scores of surviving victims include children born undersized, and wheelchair-bound victims of respiratory ailments who must now rely on portable oxygen tanks after inhaling deadly chemicals in the RB disinfectant.
South Korea this week brought criminal charges against RB’s former South Korean CEO and two former RB senior researchers. Kim Chong-in, interim leader of the main opposition party, said this week that RB’s actions are “manslaughter and professional negligence resulting in injury.”
The harm done by errant Big Business worldwide is epic in scope. And while it appears episodic, it is actually a continuum.
We have tried so many methods to tame rank behaviour in business. These include corporate codes of conduct, more honoured in the breach than the observance. They are a butt-covering exercise in encouraging judicial leniency. (J&J and RB have quite impressive ethical codes.)
We’ve tried incarcerating the bounders, including the Enron crowd, Bernie Ebbers of WorldCom, and Conrad Black. But sending the white-collar crooks of the Enron-era up the river didn’t prevent the prompt emergence of the unscrupulous mortgage brokers, unethical practitioners at credit-rating agencies, and delusional buyers of $250-million bundles of sub-prime mortgages (a.k.a. “toxic waste”) who inflated the disastrous housing bubble.
We’ve tried fines, but even the heftiest fines are paid not by the errant top managers, but by the stockholders, including teachers’ pension plans.
Boycotts are difficult to organize and sustain. Then again, South Korea could simply ban all RB productsfrom the country for 10 years, and see if that model works. We also haven’t clawed back from feckless top managers their unfairly pocketed stock-option and bonus windfalls, rewards for failure. Also, the state could simply expropriate chronically malfeasant enterprises, as the U.S. has done with a handful of self-destructive culprits in the 2008 meltdown.
We can be certain of still more debilitating behaviour by Big Business if we aren’t more determined and innovative in eradicating at least the most destructive abuses.
Reckitt Benckiser has provided a modest $8.6 million in funds to assist South Korean victims of its deadly disinfectant. Rakesh Kapoor, CEO of the RB’s British parent company, could be made to carve an $8.6-million slice from his 2015 pay packet of $33.3 million to double that fund, in a country where many people regard “the British” as having killed and injured South Koreans.
The punishment could worse for Kapor. Hammurabi would have had his hands cut off.
https://www.thestar.com/business/2016/05/20/the-harm-done-by-big-business-worldwide-is-epic-olive.html
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Endo’s AMS claims pelvic mesh plaintiffs scammed into needless explantation surgeries
May 20, 2016 | Mass Device
By Brad Perriello
Endo International (NSDQ:ENDP) subsidiary American Medical Systems Holdings repoortedly accused “a pyramid of businessmen, doctors and lawyers” of convincing women to undergo unnecessary surgeries to remove pelvic mesh implants and inflate their damage claims.
AMS has set aside $1.9 billion to cover as many as 49,000 product liability lawsuits alleging injury from the devices. But the company claims it’s found at least 4 instances of women undergoing explantation procedures their own doctor’s didn’t recommend, funded by a lender working with the explanting surgeons. The company alleged in a court filing that hundreds more have been influenced to have the surgeries by a network of lenders, doctors and attorneys “orchestrating the exploitation of unsophisticated medical and legal consumers and seeking to perpetrate a fraud,” according to Reuters.
Medical funders buy up the unpaid surgical bills for mesh plaintiffs at a discount, then put a lien on the settlement for the full amount of the bill. It’s a practice that has become deeply entangled with medical device litigation.
Members of the alleged network denied any wrongdoing, saying they helped injured women receive necessary medical care they couldn’t afford or or obtain from nearby doctors.
http://www.massdevice.com/endos-ams-claims-pelvic-mesh-plaintiffs-scammed-needless-explantation-surgeries/
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