FETAL ANTI-CONVULSANT LITIGATION: WILL LSC FUNDING LIMITATIONS LEAD TO THE COLLAPSE OF YET ANOTHER PHARMACEUTICAL GROUP ACTION

In the case of Multiple Claimants v Sanofi-Synthelabo [2007] EWHC 1860 (QB)1 (commonly known as the fetal anti-convulsant (“FAC”) litigation) the claimants failed in their application for an order for the trial of certain dispositive preliminary issues on the basis of assumed facts. With Legal Services Commission ("LSC") funding having been granted on the basis that the matter would proceed by way of a trial on the "preliminary issue on defect", it now remains to be seen whether this litigation will join the roll-call of high-profile pharmaceutical product liability actions which have met an early demise due to the cessation of public funding.
Background
The claimants are children whose mothers had, during their pregnancy, taken an anti-epileptic drug called sodium valproate, manufactured by the defendants and marketed under the name Epilim. The claimants allege that Epilim is a defective product within the meaning of the Consumer Protection Act 1987 (“CPA”). This provides that liability will attach if the safety of a product is not such as persons are generally entitled to expect. The claimants brought their actions pursuant to the Congenital Disabilities (Civil Liability) Act 1976 (“CDCLA”), which governs claims for pre-natal injuries. The claimants’ contention is that they were born disabled as a result of an “occurrence” within the meaning of s 1(2)(b) of the CDCLA and
s 6(3) of the CPA (which deals with how the CDCLA is to be given effect in relation to
1 The Defendant is incorrectly described as Sanifo-Synthelabo in the official judgment heading. liability for defective products). The occurrence was said to be “the transplacental spread of sodium valproate or its metabolites to the embryo/fetus, which then affected the embryonic and fetal development and organogenesis”.
The claimants allege that the defect that caused the occurrence was the teratogenic capacity of sodium valproate. Their primary case is that the information supplied with Epilim to a user is not a relevant circumstance when assessing the legitimate expectation of safety of persons generally for the purposes of the CPA. They also submit that the information provided by the defendants was inadequate.
The defendants say that the current state of scientific knowledge does not permit any of the anti-epileptic drugs currently on the market to be deemed free of teratogenic potential. They deny that a product such as Epilim is defective within the meaning of the CPA where, by its very nature, its use carries a potential risk of adverse events and those risks are generally known to treating practitioners and/or specifically warned about by the marketing authorisation holder. They also argue that the claimants’ case is bad in law as the CPA cannot be construed to require a court to disregard the essential factual context of the guidance or warnings provided as to adverse events or harmful characteristics of the product.
The Funding of the Case
The claimants had originally been granted funding by the LSC to pursue to trial their cases as to liability and generic causation, subject to an annual affordability review. In August 2006 the LSC notified the claimants of a decision that effectively brought the funding to an end. Judicial review proceedings were subsequently instituted and the LSC’s decision to withdraw the funding was quashed. The LSC then agreed to provide some limited funding.
A witness statement of the director of the LSC's Special Cases Unit, which is responsible for managing funding for complex or high cost civil cases, was put before Mr Justice Smith at the hearing of the claimants' application. In the statement, he referred to some of the matters identified at Rule 1.1(2) of the Civil Procedure Rules as aspects of dealing with a case justly. He stated: “Ensuring that high cost civil cases are subject to appropriate financial controls requires case managers to ensure funded cases comply with the spirit of the Woolf reforms, in particular the overriding objectives of saving expense and dealing with the case in ways which are proportionate given the amount of money involved, the importance of the case and the complexity of the issues.”
It is stated at the outset of the Civil Procedure Rules that they have the “overriding objective of enabling the court to deal with cases justly.” Mr Justice Smith noted that the director made no mention in his statement of the other matters referred to in CPR 1.1(2) such as ensuring that the parties are on an equal footing (CPR
DISPUTE RESOLUTION
OCTOBER 2007
THE FETAL ANTI-CONVULSANT LITIGATION: WILL LSC FUNDING LIMITATIONS LEAD TO THE COLLAPSE OF YET ANOTHER PHARMACEUTICAL GROUP ACTION?

1.1(2)(a)), dealing with the case in ways which are proportionate to the financial position of each party (CPR 1.1(2)(c)(iv)), and ensuring that the case is dealt with expeditiously and fairly (CPR 1.1(2)(d)). According to the director’s statement, the LSC appeared to have elevated some of the various elements that the CPR identify as contributing to the overriding objective into distinct overriding objectives in their own right. Mr Justice Smith said he did not consider this to be helpful as the court has to seek to give effect to the overriding objective as a whole.
The director explained that following the decision in the judicial review proceedings, the LSC’s Funding Review Committee (“FRC”) concluded that the case “had sufficient merits to meet the merits test contained within the Funding Code as long as the case proceeded on the basis that the preliminary issue on defect, which was alone capable of derailing the litigation, was decided first…” If the case could not proceed by way of a trial on a preliminary issue then the case would be sent back to the FRC for review.
The Court’s Findings
The claimants therefore applied to have certain preliminary issues determined first. At the hearing, the claimants’ counsel expressed the opinion that unless the court acceded to the views of the LSC as to how this litigation should proceed, it was likely that funding would be discontinued. However, Mr Justice Smith thought this submission went further than the director’s evidence.
Assumptions
Mr Justice Smith firstly considered the assumptions upon which the claimants proposed that the preliminary issues be tried. He noted that particularly in complex cases, it was necessary that the assumptions be precise and unambiguous, as much of the purpose of having preliminary issues would be lost if the assumptions had to be expanded and explained by complicated scientific and pharmacological evidence.
His Honour found that the assumptions in the instant case did not, and however drafted could not, provide a clear and precise factual basis for the determination of the issues. For example, one of the claimants’ assumptions was that Epilim “is unsafe for all pregnant women whose fetuses are exposed to it.” Yet, it was unclear what the description of “unsafe” meant. Nor was it clear what was the degree of risk and what potential damage and/or disabilities would be sufficient for the drug to be described this way. Whilst he accepted that it may be necessary to supplement assumptions with some limited evidence, the more that is required, the less attractive the proposal for preliminary issues becomes.
Preliminary Issues
Mr Justice Smith then considered the preliminary issues that the claimants proposed and found these to also be problematic. For example, one of the issues assumed there had been an "occurrence" when this was still in dispute. Another issue could not be satisfactorily decided without a firm factual and evidential basis. Mr Justice Smith therefore rejected the claimants’ application for an order for the trial of the questions as preliminary issues.
Comment
It remains to be seen whether the LSC will now pull the plug on the funding of the FAC litigation - an outcome that the claimants' counsel clearly thought was likely. Without public funding, this litigation will inevitably become the latest in a long list of group actions doomed to failure in recent years. The LSC currently funds major group actions out of a budget of £3m per annum, which potentially limits the scope of major new group litigation. Funding for group actions is under far greater control than ever before through the LSC’s Special Cases Unit and in a recent article Colin Stutt, the Head of Funding Policy at the LSC, noted that pharmaceutical actions remain “very problematic”2.
However, there may be some light at the end of the tunnel for claimants hoping to pursue pharmaceutical group actions in the future. In June this year a series of recommendations were made by the Civil Justice Council to the Lord Chancellor to improve access to justice through the development of improved funding structures.3 One of the recommendations was for the introduction of properly regulated contingency fees in multi party cases where no other form of funding is
2 C Stutt, “Who ate all the P.I.’s?” (2007) JPIL 81 at 82.
3 Civil Justice Council, “The Future Funding of Litigation – Alternative Funding Structures” June 2007. available. It may well be that contingency fees will become the mainstream funding alternative for pharmaceutical group actions in future, given the continued tightening of the LSC’s purse strings for such cases. However, the introduction of any such reforms is likely to come too late for the claimants in the FAC litigation.
If you would like any further information, please contact either of the following:
Simon Pearl
DDI: 020 7293 4041
E: spearl@dac.co.uk
Olya Melnitchouk
DDI: 020 7293 4506
E: omelnitchouk@dac.co.uk
This publication is not a substitute for detailed advice on specific transactions and problems and should not be taken as providing legal advice on any of the topics discussed.
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