"Central Europe Is New Silicon Valley," Reports attorney Joseph K. Hetrick of Dechert

In the past six months, every time I contact an attorney, defense and plaintiff, for background information or an interview, I find out they're in Europe.  Why, I wondered.  To get the story, I invited defense attorney Joseph K. Hetrick, partner at Dechert and an expert in the pharmaceutical industry, to talk to us.

He graciously accepted and the mystery was quickly solved. "Europe, especially Central Europe, is the new Silicon Valley," Hetrick reported.  So, it's no surprise that law firms and lawyers are going there to counsel, learn, and be intellectually stimulated.  Regarding the latter, the European and U.S. legal systems differ in interesting ways.

Last January, this blog interviewed Hetrick on biotechnology. Here you can read that post titled "Biotech: EXPECT Lawsuits, Government Investigations."  It was and continues to a high-traffic spot.

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Exclusive interview with Joseph K. Hetrick, partner at Dechert, on the changing European legal scene, on the record:

JG: It seems that if it's Tuesday, lawyers such as yourself are in Belgium - or Holland or Switzerland.

JG: Jane, Central Europe is where the U.S. was 10 or 20 years ago.  There has been a coming together of very smart kids in their 20s, involved with biotech startups.  Their "managers" are usually project directors at the ripe old age of 30. 

These breakthrough researchers want and need "protection" for their intellectual property, cradle to grave.  That extends from what kind of patent to apply for - we know a narrow one is better than a broad one - to structuring strategic alliances.  The goal is to manage the risk associated with this genetic engineering technology. And, yes, it can be managed. 

I explain much of what we at Dechert do in our seminars titled "Lessons Learned from Big Pharma: Minimizing Risk at Each Stage of a Therapeutic Product's Life Cycle."  Also I provide guidance from my hands-on experience.  Here you can get an introduction to that first line of defense for a biotech startup.

JG:  What must be challenging, interesting, difficult is that the legal system in Europe and the one here in the U.S. differ in significant ways.

JH:  Yes and no, that is, about the differences. Yes, our patent systems are different.  Here in the U.S. it's First-to-Discover or sometimes called First-to-Invent.  In Europe it's First-to-File.  Yes, also in the mindset of the legal system.  Right now, the system in Europe exists to give people access to justice.  It's more a matter of principle rather than seeking out big payouts.  

No, the two systems are not that far apart, at least not anymore, on the focus on consumer rights.  You might say that Europe is where the U.S. was on this in the 1970s. "Importing" a consumer-rights movement into Europe, I see, as a sign of progress. 

Currently, for instance, there are no cross-border agreements about defective products.  Say you purchased a toaster in Belgium.  Back at home in Holland, the toaster didn't work, then exploded in your hand, injuring you.  You have no way to legally address this.  You can't get your money back.  You can't seek a remedy for your injury.

That will change.  There is now coming into-place legal tools for consumers to use to obtain justice about these consumer matters.  The lion's share of the focus in on the products they actually use, ranging from toys to cosmetics.

One tool being imported, but carefully and it seems wisely, is the class-action lawsuit. Europeans are trying to select the best of the American style of massive tort actions but preventing the excesses.  They have seen how those class-action asbestos suits enriched the plaintiff lawyers and delivered small pickings to the victims. 

JG:  I guess they have also heard about how class-action lawsuits can mutate into pretzel forms of litigation such as the lead paint public nuisance lawsuit.  My hunch is that they want to steer clear of this American inventiveness in law.

JH:  Nations like France have been structuring their version of the American class-action lawsuit to reduce the potential for greed and increase the potential for delivering what they view as "justice."

JG:  Do you anticipate that the reform of the class-action lawsuit taking place in Europe as they adapt the model will have an impact on the U.S. legal system?

JH:  Not really.  Jane, you have to understand that in Europe personal injury is viewed as something to bring to the government and expect the government to resolve fairly.  In Europe, unlike the U.S., there is trust in government.  Therefore, there is no call for the aggressiveness of our legal approach.

JG:  Our approach is adversarial, right?  Two parties battle it out via private counsel?

JH:  Essentially yes.  But there is hope here that it will change.  However, the catalyst for that won't come from Europe.  The economic reality is the transaction costs associated with every phase of litigation are enormous.  With the new rules of e-discovery, for example, that process alone could cost the defendant about $100 million. The request for documents could tie up the defendant's key people full-time. 

Then come the costs at each other phase of the litigation.  Such an expense could kill off some of America's most innovative industries.  Take for instance, pharmaceutical.  Given the litigious climate in the U.S., that industry could stop taking the expensive-in-itself risk of new drug development.  Instead it could simply keep milking cash cows. 

Such potential economic disaster has been driving our government, be it agencies like the FDA or bodies such as Congress, to take the kind of action that prevents more litigation.  They are introducing and implementing regulations which clean up the problems without going to court.

JG: That's encouraging.  Do you see a seismic shift in the U.S. to trusting government?

JH:  No.  That distrust was manifested with a lot of tea getting dumped into Boston Harbor and I just don't anticipate it's going to end. 

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Joseph K. Hedrick was selected among THE BEST LAWYERS IN AMERICA for product liability litigation in the 2007 edition.  As a partner at Dechert, he's a member of the mass torts and product liability group. 

He was part of his firm's national defense team representing GlaxoSmithKline in the Baycol litigation and took a lead role in the Paxil litigation in New Jersey and Pennsylvania.  In addition, he plays a key role in the Vioxx litigation for Merck & Co. and has served as trial counsel for clients such as West Pharmaceutical, York International Corporation, Stryker Corporation, and Airgas Inc.

He can be contacted at Joseph.hetrick@dechert.com, 215-994-2250.