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Legal Developments in the The UK Legal 500 2019

Continued uncertainty for international manufacturers in the US

For manufacturers that export, a key strategic issue for in-house counsel is assessing the risk of being sued in another jurisdiction - particularly the US. 


In 2011 Sarah Croft, of Shook, Hardy & Bacon International LLP, reported on two decisions of the US Supreme Court which reaffirmed that non-US manufacturers cannot be sued in a state court unless their commercial conduct has a link to that state.1 It was hoped that these decisions gave some comfort to manufacturers that they would not end up in litigation in a state with which they had no direct commercial contact. The Supreme Court was divided, however, leaving scope for interpretation of the rulings by lower courts.


Since the cases of Goodyear Dunlop Tires Operations SA et al v Brown [2011] and J McIntyre Machinery Ltd v Nicastro [2011], there have been ten more cases on the issue of jurisdiction over foreign companies in product liability cases. Here, Sarah Croft examines how the rulings have been applied in practice in product liability cases since the Supreme Court rulings.


EU product safety and market surveillance package

As part of the European Commission's continued commitment to product safety, the Commission has proposed a product safety and market surveillance package for ‘safer products and more fair play in the internal market'. The aim is two-fold: primarily, strengthening consumer protection with a new Regulation on Consumer Product Safety (COM (2013) 78). Secondly, rationalising and strengthening market surveillance powers and obligations to provide fair competition for businesses across the member states. This will be achieved by the introduction of a specific Regulation on Market Surveillance of Products (COM (2013) 75). 


Medical device regulation 
and the PIP scandal legacy

PIP implants may be out of the headlines but the considerable impact of the scandal is now shaping the field of product liability and the regulation of medical devices. 


When announcing the new proposals for the regulation of medical devices in September 2012, the health and consumer policy commissioner John Dalli said:


‘Just a few months ago, everybody was shocked by the scandal involving fraudulent breast implants which affected tens of thousands of women in Europe and around the world. As policy makers, we must do our best never to let this happen again. This damaged the confidence of patients, consumers and healthcare professionals in the safety of the devices on which they rely every day'. 


Sarah Croft of Shook, Hardy & Bacon, examines the enduring legacy of the PIP scandal in the courts, in EU legislation regarding medical devices and in UK regulation of cosmetic surgery.


Playing safe: liability and products for children

Life for those who look after children can feel like one long risk assessment. When purchasing products designed specifically for children, parents expect the highest safety standards. Sarah Croft, of Shook, Hardy & Bacon International, assesses product liability issues and the regulatory environment for children's products in Europe and the UK.

The US Supreme Court reins in the Alien Tort Statute and brings relief to global product manufacture

Shook, Hardy & Bacon currently authors the Insurance section of The In-House Lawyer magazine. For more information and articles from this author click here.

The extra-territorial reach of US courts has long been a source of controversy and consternation for product manufacturers with global operations, due to such features of US law as discovery applications abroad in aid of US litigation,1 â€¨or the threat of the Foreign Corrupt Practices Act.2 Another weapon in the arsenal of US plaintiff lawyers against multinational companies has been the Alien Tort Statute, which plaintiffs have attempted to expand over the years with respect to its extra-territorial reach, scope of application, and defendants who may 
be targeted.
 

Driverless vehicles: liability and new automotive technologies

Shook, Hardy & Bacon currently authors the Insurance section of The In-House Lawyer magazine. For more information and articles from this author click here.

The advance of GPS mapping, radar 
and wireless systems are making the ‘driverless car’ a possibility, sooner than many may have anticipated. The widely reported trials of an automated vehicle fleet utilising Google technology has raised the profile of automated vehicles significantly. Following these successful trials, the US states of Nevada, California and Florida have all passed laws permitting automated cars to drive on their roads. 
 

Sarah Croft and John Reynolds, of Shook Hardy & Bacon International, assess the evolution of driverless or partially autonomous vehicle technology and consider the product liability issues arising for automotive manufacturers in the UK.
 

Product liability and dietary supplements

Shook, Hardy & Bacon currently authors the Insurance section of The In-House Lawyer magazine. For more information and articles from this author click here.

The market for dietary supplements in 2012 was estimated to be worth approximately £385m in the UK alone and is worth billions of dollars globally.1 Sarah Croft, of Shook Hardy & Bacon International, assesses the regulatory environment for these products in Europe and the UK and considers the product liability issues for 
this sector.


Unsafe products: 
identifying serious risks and notifying the relevant authorities

Shook, Hardy & Bacon currently authors the Insurance section of The In-House Lawyer magazine. For more information and articles from this author click here.

In the event that a safety problem is identified with one of your products, you will need to undertake a risk assessment to comply with the General Product Safety Directive.

Unsafe products: responsibilities for notification

Shook, Hardy & Bacon currently authors the Insurance section of The In-House Lawyer magazine. For more information and articles from this author click here.

Faced with a potentially unsafe product, the in-house lawyer has a critical role in ensuring that relevant notifications are made to appropriate authorities within set timeframes. Failure to comply with the General Product Safety Directive can make a difficult situation for the company even worse.


The OECD’s new global online consumer product recall portal presents both benefits and risks for..

businesses selling products abroad

Shook, Hardy & Bacon currently authors the Insurance section of The In-House Lawyer magazine. For more information and articles from this author click here.

The Organisation for Economic 
Co-operation and Development (OECD) has launched a global online consumer product recall portal that gives consumers, businesses and governments easy access to the latest information on products recalled from the markets in Australia, Canada, Europe and the United States. 
The portal may be accessed at: www.globalrecalls.oecd.org.
 

 

Italian Supreme Court rules mobile phones can cause brain tumours


Shook, Hardy & Bacon currently authors the Insurance section of The In-House Lawyer magazine. For more information and articles from this author click here.

Days after a trial court in Italy found six scientists guilty of manslaughter due to their failure to predict an earthquake, the Italian Supreme Court also hit the news after ruling in an employment case that mobile phones can cause brain tumours in heavy users. Sarah Croft, of Shook Hardy & Bacon International, assesses the potential implications of this most recent decision on future litigation relating to mobile phones in Italy and elsewhere.


Counterfeit goods and product liability

Shook, Hardy & Bacon currently authors the Insurance section of The In-House Lawyer magazine. For more information and articles from this author click here.

The added value that has been built in branded goods, usually through many years of investment by the brand owner, provides a powerful attraction and incentive to manufacturers of counterfeit goods who are harnessing the power of the internet and global supply routes in growing numbers.


Risks following a product recall, part 2:
criminal offences 
for the company 
and directors


Shook, Hardy & Bacon currently authors the Insurance section of The In-House Lawyer magazine. For more information and articles from this author click here.

In addition to civil product liability claims, a company and its directors could also face criminal charges following the recall of an unsafe product. 


Risks following a product recall, part 1: disclosure and freedom of information requests

Following a product recall, there are a number of risks to a business that the directors, senior staff and the legal team should be aware of from the outset and may need to address long after the initial recall. 


PIP breast implants: lessons for all?

The PIP breast implant affair will be a case study in the product liability context for many years to come. Two significant reports on the matter have been published recently. Sarah Croft of Shook, Hardy & Bacon International LLP considers the conclusions drawn and possible ramifications for future litigation and the regulation of medical devices.


Business interruption insurance: importance of understanding cover

February 2011 - Insurance. Legal Developments by Holman Fenwick Willan.

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Business interruption insurance is often a key component of a company’s business continuity plan. The insurance is designed to compensate an insured for the financial effect of the interruption or interference to that business as a result of physical damage to an insured property or other key external events, such as damage at a supplier’s or customer’s premises. The intention is to restore the business to the same financial position as if the loss had not occurred, subject always to the terms and conditions of the policy. 


Protecting a company and its directors: D&O insurance

December 2010 - Insurance. Legal Developments by Holman Fenwick Willan.

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The upheaval over the Past few years in the financial markets and the global economy has led to a climate of increased regulation worldwide, with greater exposures for directors and the companies by which they are employed. All of this has highlighted the importance for companies to have adequate insurance protection. Directors’ and officers’ (D&O) insurance is one such policy.

D&O cover protects a director or officer against those potentially significant personal liabilities that may arise from their negligence and breach of duty when acting in their capacity as a director or officer. It is also important to attract high-calibre personnel who may otherwise be wary of taking such positions, particularly for large multinational companies exposed to multijurisdictional regulation and legal systems. However, D&O insurance also protects the company’s balance sheet in various ways.

Do strangers to an insurance contract have a right to claim against the insurers?

November 2010 - Insurance. Legal Developments by Holman Fenwick Willan.

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Imagine the situation: your company has a significant claim against a supplier for breach of contract and/or negligence. Following the original tender process you are aware that the supplier has the benefit of liability insurance, you know the identity of the insurers and the levels of cover available. You suspect that the supplier itself is in financial difficulties or, worse still, it is in fact insolvent. In what circumstances can you circumvent the insured wrongdoer and proceed directly against the insurers? The purpose of this article is to compare and contrast the position under English and French law.


Insurance and the Bribery Act 2010

October 2010 - Insurance. Legal Developments by Holman Fenwick Willan.

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Born from increasing international co-operation on anti-bribery issues and a general acceptance that legislation relating to the issue in the UK is outdated, the Bribery Act 2010 (the 2010 Act) received royal assent on 8 April 2010. 


Anomalies of insurance law

July 2010 - Insurance. Legal Developments by Debevoise & Plimpton LLP.

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Although the courts are often at pains to point out that insurance law is merely a subset of general contract law and should be applied without any concession or discrimination simply because the subject matter is insurance, there are, in fact, several aspects that are peculiar to insurance. An understanding of these anomalies will assist in penetrating the sometimes arcane depths of insurance law. They include:

Insureds’ continuing obligations through the policy period

June 2010 - Insurance. Legal Developments by Debevoise & Plimpton LLP.

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Apart from specific requirements imposed to minimise the chance of loss, the insurer may also insist on more general obligations, such as a clause requiring the insured to take reasonable care to avoid liability, loss or damage. 


Post-loss insurance obligations

April 2010 - Insurance. Legal Developments by Debevoise & Plimpton LLP.

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When an event occurs that triggers a notification provision in an insurance contract, the terms should be complied with before quietly sitting back and waiting for the insurer to exercise its rights to adjust the loss or control any issues that arise, including litigation. It is clearly in the insurer’s interests to minimise the loss that it will eventually be paying. But an insurer is entitled to take some time to look into the problem, or it might make its mind up immediately to reserve all its rights, simply decline the claim or, in an extreme scenario, avoid the policy. What should an insured do in these circumstances before a settlement can be negotiated or its rights assessed by a court?

Current insurance law reforms

March 2010 - Insurance. Legal Developments by Debevoise & Plimpton LLP.

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For over 100 years property and liability insurance law has largely been governed by the Marine Insurance Act 1906, a product of careful thought and drafting that codified the previous 200 years of case law. Times have changed, however, particularly in the speed of communications, the availability of information and the development of the law. The asymmetry of the parties’ positions, whereby the insured knew everything about its affairs and the insurer knew nothing, is today very different. This has resulted in a great deal of activity in the review by trade bodies and the Law Commissions (of England and Scotland) of insurance law over the past ten years, culminating in two recent bills, the Third Parties (Rights against Insurers) Bill (the Third Parties Bill) and the Consumer Insurance (Disclosure and Representations) Bill (the Consumer Insurance Bill).

Terminal traps in insurance contracts

January 2010 - Insurance. Legal Developments by Debevoise & Plimpton LLP.

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The terms of any insurance contract can be categorised as conditions, conditions precedent, warranties, or terms delimiting the risk. The status of conditions and warranties in mainstream contract law is reversed in insurance law. Breach:

How much are you paying your insurance broker?

November 2009 - Insurance. Legal Developments by Debevoise & Plimpton LLP.

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Contingent commissions were A lucrative feature of the London insurance market for many years, but the enquiries engendered by Eliot Spitzer, then New York State Attorney General, highlighted the methodology of brokerage in London and resulted in their reduced use.

Insurance is a valuable asset

October 2009 - Insurance. Legal Developments by Debevoise & Plimpton LLP.

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In cases involving the lending of large sums of money, the use of the borrower’s insurance as a security asset is often viewed as the failsafe in the overall security package.1 In the event of a catastrophe giving rise not only to material damage but also to business interruption, or even the loss of a key member of the borrower’s management, there may be no other significant asset available for recourse by the lender. It is therefore surprising that so little attention is sometimes paid to the technical requirements that need to be met for the insurance policy to become an asset available to the lender. Indeed, the insurance is sometimes an afterthought. Getting the technicalities right is perhaps more important to the lender of the money, but a small mistake by the borrower can have unintended, and sometimes extreme, consequences.

Warranty and indemnity insurance

October 2009 - Insurance. Legal Developments by Debevoise & Plimpton LLP.

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Irrespective of the scope and quality of the usual due diligence in an acquisition transaction, the primary financial protection for the buyer of a company on either a share or asset deal is the scope and quality of the warranties and indemnities given on its purchase, which themselves depend on the security of the warrantors. If a buyer has any concern as to that security, and a suitable holdback or escrow of part of the purchase price is not available, one solution is to underwrite the financial risk under the warranties and indemnities by obtaining warranty and indemnity insurance. This generically splits into either a warrantor/seller policy or a buyer policy, but can also be a combination of the two, usually with the buyer policy sitting in excess of the seller policy.

Directors’ and officers’ liability insurance: problems and pitfalls

July 2009 - Insurance. Legal Developments by Debevoise & Plimpton LLP.

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One of the purposes of incorporation is to absorb and contain liability within the corporate shell: the so-called corporate veil, behind which directors used to feel reasonably safe. However, a director can in certain circumstances be personally liable to the company, its liquidator, its shareholders, third parties and any of its regulators, such as the Financial Services Authority (FSA), Health and Safety Executive, Information Commissioner, Pensions Regulator or Office of Fair Trading.

Cancelling insurance: insolvency and downgrade clauses

One of the most common concerns for both parties to an insurance contract (including reinsurance) is that the other party might become insolvent and unable to perform its obligations under the contract. Both insurer and insured will therefore wish to have the right to cancel the insurance mid-term in the event of the other party’s insolvency, or a change in its financial circumstances that makes its insolvency a more likely prospect in the near future.

Extending cover: notification of circumstances

The recent Court of Appeal decision in HLB Kidsons (a firm) v Lloyd’s Underwriters subscribing to Lloyd’s policy No 621/PK1D00101 & ors [2008] illustrates that companies and their officers must be careful to notify their insurers of circumstances that may, or are likely to, give rise to claims strictly in accordance with the relevant policy terms. Otherwise, they may be left without insurance cover for some or all of the claims, when and if they come in. In this article we consider the implications of Kidsons, and flag up the important points to be aware of.

The hidden cost of health and safety regulation

November 2008 - Insurance. Legal Developments by Reynolds Porter Chamberlain LLP.

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While the cost of compensating those injured in workplace accidents is usually eased by general liability insurance, increasingly an additional layer of costs will come from health and safety regulation, and consequent investigations and prosecutions. This article looks at how costs might arise, how legal costs may or may not be covered by liability insurance, and how the ever-increasing focus of enforcement agencies demands the allocation of resources to risk management. In this environment, the financial and administrative burdens of implementing and maintaining efficient health and safety systems can be far less than those of dealing with an accident.