Companies exposed to product liability despite lack of scientific evidence

Companies exposed to product liability despite lack of scientific evidence | Insurance Business

Companies exposed to product liability despite lack of scientific evidence

Global pharmaceutical and life sciences giant Bayer AG is currently negotiating thousands of US lawsuits claiming that the company’s glyphosate-based Roundup grass and weed killer causes a type of cancer called non-Hodgkin’s lymphoma.

More than 42,700 plaintiffs brought the suit against Monsanto Co’s Roundup (Monsanto is a subsidiary of Germany-based Bayer AG), claiming that the active ingredient glyphosate in the weed killer is carcinogenic and therefore causes a risk to public health. Plaintiffs also accused the company of deceiving customers about the risks. Bayer AG has so far lost three US jury trials over this case, but maintains its intention to appeal the decisions, stating that Roundup is safe for human use.

This is a huge product liability case, which is unique in nature. As of January 30, 2020, the US Environmental Protection Agency (EPA) concluded “after a thorough review of the best available science” that “there are no risks of concern to human health when glyphosate is used according to the label and that it is not a carcinogen.” The agency’s findings on human health risk are consistent with science reviews by many other countries, including agencies in Canada, Australia and Europe.

Despite the EPA’s very unambiguous statement on the safety of glyphosate, Bayer AG is still in remediation to settle tens of thousands of lawsuits for a figure in the range of approximately US$10 billion. To make matters worse, a California shareholder of Bayer AG filed a lawsuit in March against the company’s directors and officers, claiming they breached their duty of “prudence” and “loyalty” to the company and its investors by buying Monsanto Co. in 2018 – the company behind Roundup at the center of the glyphosate lawsuits.

The Bayer AG case is proof that companies can face significant liability, even when there is a lack of scientific evidence. But in another (arguably similar) product liability case involving sunscreen, the outlook has been very different. In the sunscreen case, concerns were raised (again in America) over the chemicals Oxybenzone and Octinoxate used in chemical sunscreens to filter out ultraviolet rays and their potentially harmful impact on the body’s endocrine (hormone making) system. 

James Kaufmann, senior manager, business development, AIR Worldwide, commented: “To date, [there’s been a lack of] scientific evidence involving human studies which would support this worry, and we have not noted any significant lawsuits on this front. But just because there’s a lack of scientific evidence, it doesn’t mean that a substance doesn’t cause harm. There could still be significant liability. [In both the sunscreen and the Roundup weed killer examples] there’s a lack of science backing up any claims of liability for bodily injury. So, what makes these two different?

“If we think through the nature of the defendants, Monsanto at the time of its acquisition by Bayer was described as - and this is a direct quote from The Washington Post – ‘Monsanto was one of the most hated large companies in the world’ It’s a huge company that produced pesticides, genetically modified crops, who spent time in the crosshairs of environmentalist groups, and whose scientists at one point even claimed unfairly influenced science.

“Now juxtapose Monsanto with brands with names like Hawaiian Tropic, Banana Boat, and Ocean Potion, all of which create a cream that not only helps prevent skin cancer, but it helps you avoid painful sunburn, moisturizes your skin, and so on. Who would you rather sue? If you’re on a jury, which is a less sympathetic defendant? In conclusion, the underlying science is important, but there are other factors at play that may have the potential to trump the science [and lead to significant liability claims].”