Confusion reigns between “indemnity” and “immunity”

This may be (wrongly) discouraging UK victims from suing

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We sporadically hear of vaccine injury cases in the UK being contemplated or even launched against covid vaccine manufacturers.  We also frequently hear people say that “the covid vaccine manufacturers cannot be sued as they have an indemnity”.

It is very important that this be clarified. An indemnity is not the same as immunity.

In the USA manufacturers have immunity (which can potentially be attacked under certain circumstances – such as in the presence of fraud) imposed by a law known as “The PREP Act”. Immunity is a legal shield.  The law simply provides that “these manufacturers shall not have any civil liability”.

But in the UK the manufacturers do not have such immunity.  What they have – in their contracts with the UK government – is an indemnity. An indemnity is an agreement that one party shall cover the losses of the other.

In this case it provides that the UK government will pay any damages which the manufacturers are liable to pay to claimants if they are sued. But it doesn’t stop anyone actually suing the manufacturers – it just means that any damages awarded are actually paid by the government (and ultimately by the beleaguered taxpayers). In exchange for this, the government gets to control and direct the defence to any claim – as well as paying the legal bills!

This has a number of implications including these:

  • If the government is “on the hook” it may well either directly or indirectly pressure the judicial system so that these cases are impeded in some way. We can hope this is not the case, but experience of other legal cases over the past few years suggests this might be naive.
  • If the government sees many claims incoming they may try to “pick off” some more obvious ones and put a “line in the sand”, setting quite a high bar for claimants in an attempt to limit the size of the eventual claims.
  • On the other hand, if they see a huge number of claims, they may choose to “fight to the death”.
  • One other scenario is that they eventually decide they were duped and they then just tell the manufacturers they are no longer honouring the indemnity.

It is also important to recognise that in the UK Parliament makes, amends, and annuls laws at will. There is nothing – except politics – to stop them just going to the manufacturers and threatening to change the law so as to hold them responsible for claims, and that they will make them easier for claimants (perhaps by extending the “limitation period” – normally 3 years – by which a claim has to be lodged or else it become time-barred).  This could, for example, be used as leverage to get the manufacturers to set up schemes of compensation.

Generally speaking, retroactive changes to laws are considered undesirable as they could make companies reluctant to do business in a particular country, since companies prefer legal certainty before committing capital; in this case however it is possible that the political imperative becomes so great that the government is effectively forced into ensuring that the injured receive proper recompense and that the manufacturer – not the taxpayer – foots the bill.

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