In a unanimous decision, the Full Court of the Federal Court upheld a decision of Justice Katzmann that found Ethicon Sàrl and related companies liable for damages and other relief relating to the supply of medical devices used in the treatment of female stress urinary incontinence and pelvic organ prolapse.
The Court (Jagot, Murphy and Lee JJ) dismissed all of the appellants' grounds of appeal.
Dismissing the appellants' 17 grounds of appeal, the Full Court upheld Justice Katzmann's findings that the companies had contravened various consumer protections in the Trade Practices Act 1974 (Cth) and the Australian Consumer Law by supplying a product with a 'defect', that was not of merchantable or acceptable quality, or fit for purpose and that had been marketed and promoted in a way that was likely to mislead or deceive. The Full Court also upheld Justice Katzmann's findings that the companies were liable in negligence, having breached their duty of care in failing to warn patients, or their treating doctors, of the risks of certain complications. The liability of the companies for breaching their duty of care in relation to pre and post market clinical evaluation of the products was also upheld on appeal.
The appellants had conceded that the complications suffered by women who had received the mesh implants could be clinically significant and could have been caused by the devices. They also conceded that they knew of the pleaded complications from the time of first supply.
The Full Court upheld the primary judge's finding that the companies had failed to warn of risks that should have been disclosed in the instructions for use. To be sufficient, information about a particular risk must inform users of both the probability and severity of the potential harm. The Full Court also rejected the companies' argument on appeal that it was not necessary to warn of the pleaded complications because some pelvic surgeons might have been aware of the risk of the complications that had eventuated or because information about the risk associated with particular complications was available in the literature. Here, pelvic surgeons generally were not aware of the complications that eventuated and in any event, would reasonably assume that statements about potential side effects in the instructions for use would reflect what the manufacturer actually knew.
Despite agreeing with the trial judge's ultimate conclusion in relation to the appellants' failure to warn, the Full Court accepted that the standard of care owed by the companies to patients is affected by the fact that the devices are supplied to patients via highly skilled surgeons who also owe a duty of care to patients. Here, it would have been sufficient for the companies to have warned surgeons of the risk of the complications rather than patients directly.
The Full Court was satisfied the evidence supported a finding that if the treating surgeons had known about the risk of the pleaded complications, they would have communicated them to their patients. This was despite evidence that the claimants had not been told by their treating surgeons about every risk that had been included in the instructions for use (that were found to have been of a materially different severity to the complications that had eventuated), and there being an absence of evidence from the treating surgeons. Given the nature and severity of the complications that eventuated, the Court was satisfied that if the risks had been communicated to the claimants, they would not have had the devices implanted.
The proposition posed by the companies on appeal that the claimants might have suffered the same injuries even if they had received alternative treatments was dismissed by the Full Court.
The Full Court also agreed with the primary judge that, on the evidence, an inference should be drawn that the devices would not have been on the market at all but for the appellants' negligent pre-market evaluation.
Relationship between warnings and defective products
Following Merck, the Full Court agreed that goods may be defective where they present a risk of injury about which a manufacturer fails to provide sufficient information. Depending on its severity, the risk need not be high – in Merck, a 0.5% increased risk of myocardial infarction in the absence of a warning was enough to constitute a defect. Equally, a product that presents a serious risk of harm can remain on the market, and even be a "product of choice", provided the manufacturer provides appropriate warnings.
It was emphasised in the Full Court's reasons that patients are generally entitled to expect that manufacturers of medical devices will provide warnings about the risk of potential complications to medical practitioners, or directly to patients that are appropriate in all the circumstances. In this case, no such warnings were provided.
Goods need not be absolutely free from risk – the level of safety required is that which the community is entitled to expect.
Misleading or deceptive conduct
The Full Court agreed that the representations that had been made as to the risks and benefits of using the devices was unsupported, so as to be misleading. Justice Katzmann had correctly found the information in the instructions for use and promotional material (which omitted warnings of the complications and gravity of risks) was misleading and deceptive.
The Full Court also did not find any error in Justice Katzmann drawing a conclusion that but for the absence of proper warning, it was more likely than not that the claimants would not have undergone treatment using the devices.
The Full Court was not persuaded that proper consideration had not been given to the evidence of pelvic surgeons, or that preferring evidence of non-clinical experts involved error.
The decision has significant implications for manufacturers of therapeutic products. The Full Court's findings provide detailed analysis of the information that is necessary to adequately disclose potential adverse events and complications that may arise from use of a medical device or pharmaceutical product.
A second Australian class action was filed in the Federal Court in January 2019 against American Medical Systems, a manufacturer of a similar product, and a third in February 2020 against the manufacturers and distributors of another mesh product, TFS Manufacturing and Covidien. A further action was commenced against the Boston Scientific Corporation in the NSW Supreme Court earlier this month.
The decision may also open the door to litigation against other respondents. The TFS / Covidien action names a doctor who designed the mesh implants, and in the UK, claims have been made against the NHS and surgeons who operated at private hospitals relating to failure adequately to warn of the risks of mesh implants.
It remains open for the companies to seek special leave to appeal to the High Court.
 Merck Sharp & Dohme (Australia) Pty Ltd v Peterson  FCAFC 128; (2011) 196 FCR 145.