§ 2. Mr. McCrindle
asked the Secretary of State for Trade and Industry how many representations he has received on the subject of product liability since 12 November.
§ The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Michael Howard)
Since 12 November the Department has received only five representations on the subject of product liability.
That is perhaps not surprising in view of the wide consultation we undertook last year on the implementation of the EC directive on product liability, when we issued more than 5,000 copies of our consultative document and received over 200 replies.
§ Mr. McCrindle
Is it correct to describe the Government's policy on this issue as a balance between introducing further rights of redress to injured consumers and containing industrial costs by allowing manufacturers certain residual defences? If so, many of us agree with that, as otherwise the cost of product liability insurance, if it is available at all, would increase considerably and ultimately so would the cost of products to the consumer.
§ Mr. Howard
I entirely agree with my hon. Friend. It is because we desire to continue to encourage innovation that the development risk defence has been retained. It is 325 not only the cost but the availability of insurance that is important in that respect, as the Association of British Insurers recently confirmed.
§ Mr. Ashdown
Does the Minister accept that many believe that the acceptance of development risk liability has been created by powerful lobbying, particularly on the part of the pharmaceutical industry? Will he undertake to look at this matter again, especially as the insurance industry has indicated that it can be made available at relatively little cost? Does he accept, for instance, that those who suffered as a result of Thalidomide would not have received compensation under the development risk clause?
§ Mr. Howard
On the last point, the answer is no. A legal decision was never reached on the liability of the manufacturers of Thalidomide since the case was settled out of court. In the absence of that decision it is irresponsible for anyone to make judgments as to whether the Consumer Protection Bill would ensure compensation for victims like those of Thalidomide and I certainly do not intend to do so. Since then, the Medicines Act 1968 provides for a comprehensive system of licensing which makes it unlawful for medical products to be manufactured, sold, supplied or imported except in accordance with appropriate licences and clinical trial certificates. I am surprised that the hon. Gentleman, representing as he does a constituency in which the aviation industry is such an important interest, should call for the elimination of the development risk defence.
§ Mr. Williams
Why are the Government willing to allow manufacturers to escape paying damages by pleading the development risk defence when Belgium and France are making no such allowance, when Germany has made it clear that it will not allow that defence in relation to drugs, medicines and pharmaceutical products, and when the Law Commission for England and Wales and the Pearson commission, which was set up in the aftermath of the Thalidomide tragedy, said that the defence should not be allowed? Why have the Government surrendered to the industrial lobby and why have they abandoned the consumer, who, in future, could be left without any action for damages in any Thalidomide-type disaster?
§ Mr. Howard
I have answered the question on Thalidomide. It is important to recognise that the development risk defence places upon manufacturers the burden of raising and proving it. The defence is defined in very precise terms and it will be necessary for the manufacturer, if he is to rely on it, to show that no producer of products of the same description might have been expected to discover the defect. It would not be sufficient to point to particular testing difficulties encountered by him or even that he had followed procedures adopted by other manufacturers. He must have taken all the steps that he might have been expected to take by the informed observer. In those circumstances, it it is right that he should have that defence.