Peter Holloway

Herbert Smith Freehills, Melbourne

peter.holloway@hsf.com

Aoife Xuereb

Herbert Smith Freehills, Melbourne

aoife.xuereb@hsf.com

Chris Lisica

Herbert Smith Freehills, Sydney

chris.lisica@hsf.com

Maxwell Herman

Herbert Smith Freehills, New York

maxwell.herman@hsf.com

Introduction

Australia is different to many other jurisdictions when it comes to potential claims for compensation for injury or loss allegedly caused by a vaccine. Whereas many countries, at least 25 at last count, have implemented no-fault schemes to compensate people who have suffered a vaccine-related injury,[2] no such scheme exists in Australia, meaning that anyone seeking compensation for injury or loss allegedly caused by a vaccine must commence legal proceedings and have their claim determined by a court in the usual manner.

The cost and burden of pursuing individual vaccine-related personal injury claims may mean that the Australian class action regime is utilised for the pursuit of these claims. In Australia, a class action can be commenced if seven or more persons have the same or a similar claim against the same entity that gives rise to at least one substantial common issue of law or fact. Unlike class actions in many other jurisdictions, there is no requirement in Australia for certification of the claim as a class action.

This article contrasts the position in the United States and Australia, mentions the potential for class actions in Australia and also identifies some of the challenges that a claimant in Australia may encounter in pursuing these claims as class actions.

Vaccine-related litigation in the US

Historically, the US is the most active country in the world when it comes to consumer litigation, particularly with respect to claims regarding the safety or design of products, the quality of their manufacture and the adequacy of warnings provided to consumers. It often proves to be a bellwether for litigation in other jurisdictions. Frequently, successful litigation or settlement of a product liability claim in the US is a precursor to similar litigation (in particular, class action litigation) in Australia.

In respect of Covid-19 vaccines, however, a product in their own right, the situation is quite different.

On 10 March 2020, the US Secretary of the Department of Health and Human Services declared pursuant to the Public Readiness Emergency Preparedness Act (the 'PREP Act') that Covid-19 is a public health emergency. The declaration granted to manufacturers, distributors and those who administer vaccines broad immunity from suit and liability in respect of all private claims for loss related to Covid-19 vaccinations, subject to a narrow exception for ‘wilful misconduct'. In the absence of ‘clear and convincing’ evidence of misconduct, claims that an individual has been seriously injured, or died, as a result of a Covid-19 vaccine are limited to claims for compensation against the Countermeasures Injury Compensation Program (CICP), a federal fund that is distinguishable from, and more limited in terms of compensation than, the National Vaccine Injury Compensation Program.

As a result, individuals with injuries allegedly caused by a Covid-19 vaccine, who do not wish to apply for or are ineligible for compensation from the CICP, are confined to lawsuits that are either within the exception to PREP Act immunity for ‘wilful misconduct’, or circumvent PREP Act immunity altogether by asserting that the factual circumstances of the case fall outside the scope of the PREP Act, for example, by asserting that the defendant is not a person/entity with immunity or that the claimant’s injuries were caused by conduct other than the creation, distribution or administration of the vaccine. However, the exception to PREP Act immunity is narrow and the scope of its protection is broad. Historically, in other contexts, most claimants have been unsuccessful in establishing that the target of a claim does not have immunity under the PREP Act. Moreover, such lawsuits would be intensely fact-specific and dependent upon individual circumstances, which US courts have held are not amenable to class action treatment, and are unlikely to give rise to the scale of litigation that would signal class action risk in Australia. It is worth noting, however, that the PREP Act does not confer immunity from federal enforcement actions on manufacturers, distributors and those who administer Covid-19 vaccines.

The position in Australia

In contrast to the position in the US, in Australia there is no immunity from suit for manufacturers, suppliers or those who administer Covid-19 vaccines.

Rather, the Australian Government has provided an indemnity to the suppliers of specific vaccines that covers ‘certain liabilities that could result from their use’.[3] However the terms of the indemnity are confidential, and therefore, the extent of any protection is unknown. In relation to those who administer vaccines, the Australian Health Minister has said that there are ‘indemnity agreements’ in place which have effect that ‘… no doctor need worry...’,[4] and there have been media reports in Australia that the Australian Government will reimburse medical indemnity insurers 50 per cent of eligible claims above $500,000.[5] All of this is very obscure, suggesting that medical professionals who administer vaccines may need to call upon their professional indemnity insurance in the first instance. Given the apparent confidentiality of these indemnity arrangements, it is not at all clear which entities or persons might be made the target of any class actions.

Also in contrast to the position in the US, Australia does not have a certification procedure that applies to the commencement or continuation of a class action. In Australia it is relatively straightforward to commence a class action provided certain threshold criteria are satisfied. This is a key distinction between the maintainability of class actions in the US and Australia.

This is in a context where it is accepted that vaccines supplied in Australia are not expected to be risk-free. Relevantly, in the Explanatory Memorandum that accompanied the introduction of the Trade Practices Amendment Bill 1992 (Cth), the precursor to the current Australian Consumer Law, it was stated that:

‘…there are a number of known negative side effects associated with certain pharmaceuticals and vaccines. It is also generally accepted and known that these side effects cannot be avoided. Such products are known to confer substantial benefits which flow to the wider community at large. The small statistical chance of injury associated with them does not of itself mean that they are “defective”.’[6]

As the roll-out of Covid-19 vaccines is still in the early stages in Australia, it is too early to say with precision the types of claims that might be made by consumers and recipients of the vaccines, but it can be expected that careful consideration will be given by plaintiff lawyers to whether a duty to warn of known risks has been discharged.

In product liability class actions in Australia involving medical devices or pharmaceutical products, it is often alleged that warnings should have been provided to certain groups within the general population, or that existing warnings should have been supplemented or modified, and there are often issues about who is responsible for identifying specific risks and administering suitable warnings, particularly where there is the involvement of a ‘learned intermediary’, such as a medical practitioner. This would be particularly apposite in these circumstances where a healthcare provider is administering the Covid-19 vaccine.

In Bryden v Chief General Manager of the Health Department,[7] the claimant (who had a suppressed immune system) successfully sued the Victorian Health Department for negligence on the bases that it had failed to warn him of the risk to persons with impaired immune systems receiving the Bacillus Calmette–Guérin (BCG) tuberculosis vaccine, failed to ensure supervision by a medical practitioner and failed to adopt an adequate screening process. This was in circumstances where the manufacturer (who was not a party) had placed a warning on the vaccine packaging that confirmed that the vaccine should not be administered to persons who were immune-suppressed or chronically ill.

Nevertheless, prospective claimants could face significant challenges with these types of claims. Under the Australian Consumer Law, defendants to a product liability class action may plead a ‘state-of-the-art’ defence, the effect of which is that products will not be regarded as defective if the state of scientific or technical knowledge at the time the products were supplied was not such as to enable the alleged defect to be discovered. Given the reports of blood clots in certain recipients of Covid-19 vaccines, the state of scientific and technical knowledge of the interaction of a vaccine with the human body is evolving rapidly, and the availability of this defence is likely to be an issue.

As with any product liability class action in Australia, claimants could also face difficult legal issues with respect to causation and proof of loss or damage. The circumstances, medical history and background of every individual differ, and the interaction of these unique characteristics with a class action regime would present complex issues for the parties and court.

Representative claimants would need to establish that not only did a Covid-19 vaccine have a ‘defect’ (eg, it might be alleged that the vaccine failed to meet the level of safety that persons generally are entitled to expect due to the (alleged) inadequacy of warnings and information) but also that they suffered injuries because of that defect, and defeat any statutory defences that might be pleaded, such as the state of scientific and technical knowledge.

These issues can be further complicated if there has been the involvement of a learned intermediary. Any risk assessment undertaken by the learned intermediary in respect of the claimant will be examined, as will the extent to which this risk assessment was informed by the available (and evolving) science, and knowledge at the time of the risks. Moreover, evidence from a claimant about what he/she would have done had the claimant known about a particular risk, although accepted in some product liability proceedings, may not carry as much weight in circumstances such as where proof of vaccination may be required for employment or international travel.

Conclusion

For the reasons outlined, subject of course to how the rollout of Covid-19 vaccines unfolds, it is possible that class actions will emerge in Australia concerning Covid-19 vaccines, even despite the absence of similar litigation in the US. In that eventuality, claimants and group members will have to navigate legal issues of the type that typically arise in product liability class actions in Australia.

Notes