In decision 2 Ob 77/25z, the Austrian Supreme Court (OGH) has referred a highly sensitive and practically important question to the Court of Justice of the European Union (CJEU):

Does the loss of earnings suffered by a woman as a result of an unwanted pregnancy caused by a defective intrauterine device (IUD) qualify as “damage caused by death or personal injury” within the meaning of Article 9(a) of Directive 85/374/EEC (Product Liability Directive)?

The answer may significantly shape the future of product liability in the healthcare and medical device sector across the EU.

The facts: A defective IUD and an unintended pregnancy

The case concerns a copper-containing IUD manufactured by the defendant. The claimant, having completed her family planning, had the device inserted in 2017. Regular medical check-ups confirmed correct positioning until 2020.

Between 2020 and January 2021, one arm of the IUD broke off due to a product defect. The device lost its contraceptive effect, and the claimant became pregnant unintentionally.

After a period of reflection, she decided against termination and gave birth to a healthy child in September 2021. Because of pregnancy, childbirth and subsequent childcare, she resumed work only around 16 months after the birth and claimed approximately EUR 37,700 in loss of earnings under the Austrian Product Liability Act (Produkthaftungsgesetz, PHG).

The OGH has already confirmed that:

• the IUD was defective, and
• the defect causally led to the pregnancy.

Diverging approaches in the Austrian courts

The lower courts took different views:

• Court of First Instance: dismissed the claim entirely, holding that the birth of a healthy child – even if unwanted – does not constitute compensable damage.
• Court of Appeal: awarded minor items (pain and suffering, travel costs, replacement costs of the IUD) but rejected the claim for loss of earnings as a mere indirect financial consequence.
• Supreme Court: accepted defect and causation, but considered the legal classification of the loss of earnings under EU law unclear and therefore referred the matter to the CJEU.

The core legal issue: What counts as “personal injury” under Article 9(a)?

Article 9(a) of the Product Liability Directive covers “damage caused by death or personal injury.” Pure financial loss, by contrast, is not recoverable.

The difficulty lies in classification:

• Narrow approach

Loss of earnings resulting from the birth of a healthy child is merely an indirect economic consequence.
If pregnancy and childbirth (when medically normal) are not considered “personal injury” in the relevant sense, the claim fails as unrecoverable pure economic loss.

• Broad approach

The insertion of a defective medical device into the body – and the resulting unwanted pregnancy – constitutes a violation of physical integrity.If that threshold is met, all material consequences of that personal injury, including loss of earnings, must be compensated. The CJEU has consistently interpreted “damage caused by personal injury” broadly in other medical device contexts (e.g. Boston Scientific).

The OGH explicitly notes that the Directive requires effective and full compensation for damage resulting from personal injury, while excluding pure economic loss.

The unresolved question is where exactly this case falls.

Why this matters beyond Austria

Although the reference arises from Austrian proceedings, the implications are EU-wide.

• For medical device manufacturers
• Increased exposure to substantial consequential damages in contraception and other implantable device cases.
• Potential re-evaluation of risk allocation and insurance coverage.
• Heightened scrutiny of warning systems and post-market surveillance.
• For healthcare providers
• While the present case concerns manufacturer liability, a broad interpretation may indirectly influence parallel litigation strategies in medical malpractice cases.
• The interplay between product liability and professional liability could become more complex.
• For product liability doctrine
• The case tests the limits of the Directive’s exclusion of pure economic loss.
• It forces clarification of when a defective medical device interferes with bodily integrity in a legally relevant way.
• It may influence future interpretation under the new Product Liability Directive (EU) 2024/2853, even though that instrument does not apply to the present facts

A structural question for EU product liability law

At its core, the case raises a fundamental issue:

Is the economic burden of an unwanted pregnancy the realisation of the very risk that a defective contraceptive product creates?

Contraceptive devices are designed precisely to prevent pregnancy and its physical and economic consequences. If their failure due to a defect results in pregnancy, it is difficult to argue that the ensuing financial impact is entirely outside the protective scope of product liability law.

From a policy perspective, a narrow interpretation may appear formalistic. A broad interpretation, however, significantly expands manufacturers’ exposure in highly sensitive areas of reproductive health.

Outlook

The OGH has suspended the proceedings pending the CJEU’s ruling

The forthcoming judgment will not only decide this individual dispute but may redefine the boundary between compensable personal injury and excluded economic loss under EU product liability law.

For stakeholders in the healthcare and life sciences sector, this is a case to watch closely.