Thinking | 12 February 2021

Health & Community Law Alert: liability issues with COVID-19 and COVID-19 vaccines – who should be responsible for adverse events?

By Alison Choy Flannigan

With the current debate on whether or not COVID-19 vaccines should become mandatory and vaccination programs underway in many countries, the question arises – who should be responsible for adverse events in relation to the vaccines?

Current situation in Australia on the COVID-19 vaccine

The Australian Government has entered into three separate agreements for the supply of COVID-19 vaccines with Oxford University/AstraZeneca, Novavax and Pfizer/BioNTech. The Australian Government has also joined the COVAX Facility, which will allow for the purchase of vaccine doses as they become available. The Facility is investing in a diverse portfolio of potential COVID-19 vaccines. To date, more than $3.3 billion has been invested through these agreements[1].

The Oxford University/AstraZeneca, Novavax and Pfizer/BioNTech vaccines, if proven to be safe and effective, will be available in Australia as early as the first half of 2021. According to the Australian COVID-19 Vaccination Policy, those who are at increased risk of exposure, developing severe outcomes from COVID-19 or working in services critical to societal functioning will be given priority[2].

The Pfizer vaccine has now received provisional approval in Australia by the Australian Therapeutic Goods Administration for people 16 years of age and over.

Government indemnities

In the 2020-21 Budget Papers, the Australian Government announced that it has provided an indemnity to Oxford University/AstraZeneca, ‘covering certain liabilities that could result from the use of the vaccine’[3]. However, it is unclear what this indemnity deal means in practice. The Government has provided similar deals to certain pharmaceutical companies that manufacture small pox and influenza vaccines for Australia[4].

Unlike countries such as the US and UK, Australia does not have a no-fault vaccine compensation scheme or specific COVID-19 vaccine compensation scheme for rare side effects. Further, Australia’s National Disability Insurance Scheme does not compensate individuals for temporary vaccine-related injuries. However, the Australian Government may choose to introduce a no-fault compensation scheme as its COVID-19 vaccine rollout plan progresses.

Under the current arrangements there is no restriction on liability in Australia other than currently exists under civil liability legislation, for example, in terms of severity of loss as a threshold for general damages, caps on general damages and caps on economic loss. The Australian Government has provided an indemnity to the vaccine companies, likely in limited circumstances.

Who could be liable in the event of an adverse event?

The potential liability for an adverse event in relation to a COVID-19 vaccine in Australia will depend on the circumstances of the adverse event but may include:

  1. In relation to vaccine clinical trials, the duty of care of the sponsor of the clinical trial to the trial participants to perform the trial in accordance the protocol and to obtain appropriate consent from the trial participants;
  2. The duty to warn of contra-indications and risks – this duty is likely to be held by the health professionals who administer the vaccine to the patient (and their employer, for example, a hospital or clinic) as well as the manufacturer in publishing product information with the vaccine packaging;
  3. The duty to ensure that the product is stored and shipped in accordance with the manufacturer’s recommendations (including temperature and the use of multi-dose vials (as applicable)) – this duty is likely to be held by the supply chain and the hospital or clinic;
  4. The duty to manufacture the drug in accordance with regulatory requirements, including Good Manufacturing Practice (GMP), imposed as a regulatory requirement upon the manufacturer under therapeutic goods legislation – Good Manufacturing Practice (GMP) describes a set of principles and procedures that when followed helps ensure that therapeutic goods are of high quality. A basic tenet of GMP is that:
    • quality cannot be tested into a batch of product; and
    • quality must be built into each batch of product during all stages of the manufacturing process.
  5. There are different codes of GMP, depending on the type of therapeutic good:
    • Good Manufacturing Practice for Medicines; and
    • Good Manufacturing Practice for Human Blood and Tissues.
  6. The duty of the sponsor of the therapeutic good to comply with therapeutic goods administration laws (including in relation to the supply, packaging and promotion of the goods) and to provide accurate information concerning safety and efficacy to the Australian Therapeutic Goods Administration as part of the provisional registration application process;
  7. The duty to ensure that the drug is free of defects (other than stated contraindications) – this duty is likely to arise upon the supplier; and
  8. Potential liability of the Government if the Government takes on any of the above roles and should the Government make the vaccine mandatory. We note that the Government has been following the medical advice in accordance with its medical experts. This is relevant to discharge the Government’s duty under Australia’s civil liability legislation.
  9. The other issue is who should be responsible for the lack of access to COVID-19 vaccines?

The above is subject to laws which may be passed by the Government to limit liability.

In the UK, we note that medical practitioners have been seeking an indemnity from the Government in relation to treating COVID-19 because of the stress on the system when the hospitals are over-run.

It is really important, in terms of obtaining the confidence of the community to take the vaccine, that there are clear lines of responsibility and that the Government and the relevant pharmaceutical companies clearly communicate the risks and contra-indications for the COVID-19 vaccines to those administering the vaccines – so that they can explain the risks and contra-indications to patients. For example, whether or not the COVID-19 vaccines should be provided to children and to pregnant women.

Duty of care to trial participants

In Australia, all research involving humans must comply with the principles set out in the following guidelines:

  1. Guidelines for Good Clinical Practice;
  2. The National Statement of Ethical Conduct in Research Involving Humans[5];
  3. The TGA Clinical Trial Notification (CTN) Regulatory Scheme; and
  4. ISO 14155: 2019.

Sponsors owe trial participants a duty of care to obtain informed consent and conduct the trial ethically and in accordance with the protocol.

Participants in clinical vaccine trials can be compensated for injuries resulting from their participation. According to Medicines Australia’s Indemnity and Compensation Guidelines, ‘compensation should be paid when, on the balance of probabilities, the injury was attributable to the administration or use of a product under trial or any clinical intervention or procedure provided for by the protocol that would not have occurred but for the inclusion of the Subject in the trial’[6].

Manufacturing responsibilities under the Therapeutic Goods Act

In Australia, the Therapeutic Goods Act 1989 (Cth) imposes several obligations on manufacturers of therapeutic goods. Manufacturers of biologicals such as vaccines must comply with the applicable Good Manufacturing Practice (GMP) principles and ensure that manufactured goods conform to any applicable standards.

The current Therapeutic Goods (Manufacturing Principles) Determination[7] specifies that medicinal products supplied in Australia have to meet the PIC/S Guide to Good Manufacturing Practice (GMP)[8]. This standards sets requirements for pharmaceutical quality systems, equipment, quality controls and packaging operations.

Manufacturers are also responsible for informing the TGA of any information that indicates that the quality, safety or efficacy of therapeutic goods is unacceptable.

Australian Consumer Law

Product liability for manufacturers

Australia’s product liability regime for ‘defective goods’ is set out in the Competition and Consumer Act 2010 (‘Australian Consumer Law’) (ACL). ‘Goods’ have a safety defect if their ‘safety is not such as persons generally are entitled to expect’.

Under the ACL, a manufacturer is liable to compensate an individual if the goods have a ‘safety defect’ and the individual suffers injuries because of the defect. This cause of action is available against the ‘manufacturer’, as opposed to the ‘supplier’, of defective goods.

The definition of ‘manufacturer’ is very broad and includes the actual manufacturer and ‘deemed manufacturers’ including any person who holds themselves out to the public as the manufacturer of goods, permits their name, brand or mark to be applied to goods, allows another person to hold them out as a manufacturer of goods or imports goods into Australia where the manufacturer does not have a place of business in Australia (section 7).

The ACL provides a non-exhaustive definition of ‘goods’ that is likely to include derogatory drugs and vaccines. There are a number of defences available for manufacturers, including that the state of scientific or technical knowledge did not allow the defect to be discovered.

Arguably, a pharmaceutical company would be liable under the ACL for injuries caused if there are errors in the manufacturing process. For example, contamination, adulteration, improper configuration, inadequate testing or incorrect labelling. However, the ACL only applies to manufacturers that supply goods ‘in trade or commerce’. It was held in ACCC v Baxter Healthcare [2006] FCAFC 128 that government functions are not discharged ‘during the course of business’ for the purposes of the ACL.

Consumer guarantees for suppliers

The ACL also sets out several ‘consumer guarantees’ for the provision of goods and services, including the guarantee as to acceptable quality and fitness for any disclosed purpose. Consumers may be entitled to compensation for damage and loss from the supplier if goods fail to meet one or more of these consumer guarantees.

The definition of ‘acceptable quality’ includes whether the product is ‘free from defects’, ‘safe’ and ‘fit for all purposes for which goods of that kind are commonly supplied’.

However, as discussed, the principle in ACCC v Baxter Healthcare [2006] FCAFC 128 applies.

Duty of care for health professionals

Duty of care

A compensable claim may arise as ‘negligence’ where vaccines have been improperly administered by a medical professional.

In New South Wales, section 5O of the Civil Liability Act 2002 contains the elements for the test of professional negligence. Similar legislation applies in other States and Territories, for example the Wrongs Act 1958 (Vic).

5O  Standard of care for professionals

(1) A person practising a profession (a professional) does not incur a liability in negligence arising from the provision of a professional service if it is established that the professional acted in a manner that (at the time the service was provided) was widely accepted in Australia by peer professional opinion as competent professional practice.

(2) However, peer professional opinion cannot be relied on for the purposes of this section if the court considers that the opinion is irrational.

(3) The fact that there are differing peer professional opinions widely accepted in Australia concerning a matter does not prevent any one or more (or all) of those opinions being relied on for the purposes of this section.

(4) Peer professional opinion does not have to be universally accepted to be considered widely accepted.

However, the section 5O test does not apply to ‘liability arising in connection with the giving of (or the failure to give) a warning, advice or other information in respect of the risk of death of or injury to a person associated with the provision by a professional of a professional service’[9].

Duty to warn

Medical practitioners also have a duty to warn their patients of risks associated with treatments and procedures. It was held in Rogers v Whitaker (1992) 175 CLR 479 that practitioners must warn of risks that would be of significance to a particular patient. However, most state and territory civil liability legislation provides that there is no proactive duty to warn of an ‘obvious risk’.

It is imperative that all possible side effects of a COVID-19 vaccine are disclosed to enable medical practitioners to discharge their duty to warn.

An explanation of the contraindications and risks associated with a treatment or procedure reduces the risk of liability as the patient assumes those risks.

Australian case law on vaccine-related injuries

There is a dearth of Australian case law specific to vaccine-related injury compensation.

Carey-Hazell v Getz Bros & Co (Aust) Pty Ltd [2004] FCA 853 provides some insight on the Court’s approach to an individual's idiosyncratic reaction to an otherwise ‘safe’ medical procedure. In this case, the applicant suffered from a heart condition since childhood and underwent surgery for repair of his mitral valve. However, during surgery the repair of the valve was unsuccessful and so a mechanical mitral valve was implanted. The patient suffered infarcts to the spleen and kidney and had a stroke. The mechanical valve was later removed and replaced. The initial valve was returned to the manufacturer and found to be chipped. The Court held that the failure to warn did not render the product defective and the applicant could not establish that the chip caused the thrombo-embolic events suffered. Evidence established the applicant had been informed of the risks with the procedure.

In 2011, Australian and New Zealand thalidomide claimants launched a class action against the British thalidomide supplier Diageo for birth injuries caused by their pregnant mothers’ consumption of the drug. The action was against the German company Grunenthal GmbH, which developed and marketed the product as a tranquiliser and treatment for morning sickness in the 1950s. The drug was made available in Australia by Distillers Company Limited. It was alleged that Grunenthal portrayed the drug as ‘completely safe’, despite inadequate testing. Between 1956 and 1961, the company allegedly received reports of birth deformities in infants whose mothers took thalidomide during pregnancy, but ignored, suppressed and denigrated people who complained. The class action ultimately settled outside of Court, with the British distributor agreeing to pay the victims $89 million.

Commentary

There is likely to be some adverse events in relation to the COVID-19 vaccine, as there are with any medication. However, the risk of those adverse events needs to be balanced with the risk of infection and deaths arising from COVID-19.

Compliance with existing regulatory requirements concerning safety and efficacy in the provisional approval of therapeutic goods is vital, as is reliance on evidence based medical advice. This is not only in relation to ensure that the vaccine is effective and safe but also to build confidence in the community to take the vaccine.

Effective communication of risks and contraindications is also necessary in building trust.

As explained above, there are a number of obligations by multiple people and organisations in relation to the COVID-19 vaccine. Potential liability encourages corporate and clinical governance, safety and efficacy and responsible corporate behaviour but we don’t want the fear of liability to obstruct the pathway to protecting the most vulnerable in our community.

This article was written with the assistance of Lauren Krejci, Paralegal.


[1] https://www.health.gov.au/initiatives-and-programs/covid-19-vaccines/australias-vaccine-agreements
[2] https://www.health.gov.au/sites/default/files/documents/2020/12/australian-covid-19-vaccination-policy.pdf
[3] https://budget.gov.au/2020-21/content/bp1/download/bp1_bs9_w.pdf
[4] Ibid
[5] https://www.nhmrc.gov.au/about-us/publications/national-statement-ethical-conduct-human-research-2007-updated-2018#block-views-block-file-attachments-content-block-1
[6] https://www.medicinesaustralia.com.au/policy/clinical-trials/indemnity-compensation-guidelines/
[7] https://www.legislation.gov.au/Series/F2020L00864
[8] https://www.tga.gov.au/publication/manufacturing-principles-medicinal-products#partI
[9] Civil Liability Act 2002 (NSW) s5P.

Contact

Alison Choy Flannigan

Alison Choy Flannigan

Partner & Leader, Health & Community

With over 25 years of corporate, commercial and regulatory experience, Alison has specialised in advising clients in the health,...

Related industries

You might be also interested in...

Employment & Workplace Relations | 22 Jan 2021

Can employers require their employees to get the COVID-19 vaccine?

Whether a private employer can direct its employees to be vaccinated is a multi-faceted issue. The central question is whether an employer’s direction to be vaccinated is lawful and reasonable.

Health & Community | 6 Nov 2020

Health & Community Law Alert: mandatory vaccines and COVID-19 – balancing public health and human rights

The vaccination debate used to be about the rights of parents to decide. But there are wider public health considerations. Has the vaccination debate shifted? Where do the human rights of the individual fit with social responsibility and obligation?