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Government Decision on Feasibility of Litigation against Certain Pharmaceutical Companies

26 July 2006

The Government today (Wednesday) decided to accept expert legal opinion from the United States and Ireland in relation to the feasibility of conducting litigation against certain international pharmaceutical companies which supplied haemophilia treatment products which were infected with Hepatitis C and HIV.

The advices are to the effect that litigation by the Irish State against these companies would not be successful in either the United States or Ireland and that proceedings should not be instituted in either jurisdiction. There is no prospect that the litigation would be a success and indeed would have almost insurmountable obstacles to overcome. Having carefully considered these advices the Government has decided not to proceed with the litigation.

The Tánaiste said : "The Government acknowledges the terrible tragedy which befell Irish residents whilst availing of clotting factor products but is convinced that no useful purpose would be served by the proposed litigation."

While acknowledging this tragedy, the State has taken all reasonable efforts to make restitution and has put in place more measures than any other single country worldwide. These measures include the establishment of an inquiry; investigation into the feasibility of conducting litigation; establishment of a comprehensive compensation scheme; provision of a range of health care services free of charge; improvements to haemophilia services at the National Centre, St. James's Hospital, and at regional haemophilia centres; establishment of consultative fora (the National Haemophilia Council and the Product Selection and Monitoring Advisory Group) and the establishment of an insurance support scheme.

"The Government believes that it would be of more benefit now to the haemophilia community to concentrate resources on improving services to persons with haemophilia, including those infected with Hepatitis C and HIV rather than initiating litigation or another inquiry into the matter, with no prospect that either action would have a satisfactory outcome."

Today's decision in no way affects Government's commitment to continue to provide a comprehensive range of supports to those infected and their families.

The Tánaiste said "I want to assure the haemophilia community that my Department and I will continue to work in close co-operation with the Irish Haemophilia Society to ensure that every possible support is provided to persons who were infected with HIV and Hepatitis C from the administration within the State of infected blood products."

Background to the matter

In July 2003 the Government was asked by a US law firm, Lieff Cabraser, Heinmann and Bernstein to consider instituting proceedings against manufacturers of blood products which caused severe injury, damage and death to members of your society. It was suggested that Ireland should seek to recover damages it had paid to haemophilia victims of defectively manufactured blood products. In addition, it was suggested that the costs of the Lindsay Tribunal and health care costs inter alia could be recovered in such litigation. Serious policy and legal concerns were raised about the proposal and it was recommended that further legal advice be sought on the matter.

The lengthy legal advice from Lieff Cabraser was examined by the Office of the Attorney General and subsequently by Irish counsel. Ultimately, counsel advised that the issue of whether proceedings might be instituted in the United States should be examined by suitably qualified and experienced US attorneys.

Irish and US Legal advice

The State encountered very substantial difficulties in retaining US lawyers to advise. Some 17 firms approached by the State over a lengthy period indicated that they had a conflict of interest and could not advise.

Eventually, Jenner and Block of Chicago were retained for the State by Herbert-Smith, LLP London. The State is absolutely satisfied that the advice it has received from Jenner and Block was given after the issue of any conflict of interest was thoroughly investigated. It was a condition of giving the advice that no conflict of interest arose. Neither Jenner and Block, Herbert-Smith, Irish Counsel nor the State itself considers that the past representation by Jenner and Block of a potential defendant in the proposed litigation constitutes such a conflict. None of the potential defendants were clients of Jenner and Block when they were approached to give the advice or at any time during the giving of the advices sought.

Ireland has been advised not to institute the proceedings first suggested by Lieff Cabraser in July 2003. The basis for the advice received is as follows:

• Ireland knew or ought to have known by a date in 1991, that blood products manufactured by the potential defendants had contributed to or caused the infection of haemophiliacs with HIV. By December 1995 at the latest the State knew or ought to have known that blood products had been contaminated with Hepatitis C.

• The Statutes of Limitations governing breach of contract actions in the states where the claim might be maintained have long since expired and indeed expired no later than 1995. The states where Ireland might institute proceedings have enacted statutes known as Blood Shield Statutes which bar claims based on implied warranties.

• The damages suggested by the firm Messrs. Lieff Cabraser, which offered to take the case on behalf of the State were too remote to be recoverable.

• Ireland could not maintain an action in the US on behalf of Irish haemophiliacs because the US doctrine of parens patriae (which permits a state to sue on behalf of an injured group) would not embrace an action of this kind.

• Rules prohibiting double recovery would prohibit the State from seeking compensation on behalf of persons who have received compensation in Ireland.

• The potential Defendants would probably be in a position to defend their manufacture of products on the basis that the manufacture was conducted in accordance with then existing industry standards.

• Any action instituted in the US would be dismissed on the basis of forum non conveniens. (a rule which requires litigants to sue in the most appropriate country)

• Following the receipt of the advices from Jenner and Block the State again sought the assistance of Irish Counsel. They have advised that there are three outstanding features to the opinion now received from Jenner and Block.
  • That Irish law will govern the proceedings whether instituted in the United States of America or in Ireland.
  • That the courts of New York and the Federal District Court for Northern Illinois have dismissed proceedings brought against manufacturers on the basis of forum non conveniens. In addition, the Irish High Court and Supreme Court have accepted that Ireland is the proper forum for litigating such grievances.
  • That the State should not knowingly institute proceedings where the applicable limitations periods have long since expired.

Following the advice of the Attorney General, the Government has decided to follow the recommendations of Jenner and Block and Counsel retained by the Attorney General in Ireland. No proceedings will be instituted in the United States of America.

The Attorney General also asked Irish Counsel to advise on whether the proceedings suggested by Lieff Cabraser could now be instituted in Ireland. The unreserved opinion of Counsel was that such an action, whether based on tort or contract, would be statute barred. The latest date of knowledge on the part of the State of the existence of defective blood products would appear to be 1991. Approximately fifteen years have passed since that time and it is clear that the State has known about the defective blood products for many years before that. In these circumstances, it is not possible for the State to institute proceedings in the certain knowledge that they are statute barred.

It is also the view of Irish Counsel that the vast bulk of the damages that would make up such a claim are too remote for recovery under Irish law and that even if such a claim was within the applicable limitations period, it would be struck out as contravening the guarantee to a fair hearing within a reasonable period of time.