The Clinical Trials Regulation (‘CTR’), which came into force last year, has modified (and in some cases increased) responsibilities for sponsors, streamlined reporting processes and improved protection for clinical trial subjects. In light of the regulatory changes, now is a good time to consider best practices when negotiating and performing Clinical Trial Agreements (‘CTAs’).
The following are key contractual issues to consider in order to minimise the risk of subsequent disputes.
- Clarity of obligations: Many disputes in respect of CTAs arise from a lack of clarity in respect of each party’s responsibilities under the terms of the CTA. CTAs should therefore clearly set out the obligations of each party. Parties should define deliverables and deadlines for important milestones, and sponsors may wish to ensure the CTA contains provisions addressing the options available to them should delays to deliverables occur. If ancillary documents are referred to and incorporated into the CTA, for example as part of the service specifications, parties should ensure they are familiar with their content. Depending on how those documents are incorporated, they may create obligations or even constitute contractual representations.
- Clear termination processes and provisions: Disputes regularly arise under CTAs as to whether termination is available in the circumstances that have arisen, and whether contractual termination procedures have been followed.
- Limitations of liability: Parties will also wish to limit their liability under the terms of the CTA where possible (for example, by specifying that they will not be liable for loss of profit, indirect, special, punitive, or consequential damages arising out of the clinical trial). Parties should consider what protection the CTA gives them should something go wrong, including the extent of their own liability under the CTA should they be found to be in breach, and whether it allows them to claim damages to the extent required.
- Governing law: Careful thought should be given to the governing law clause adopted by a CTA as they can significantly affect the rights and obligations of the parties, including the relief available in a dispute. A US company dealing in Europe may wish, for example, to provide for a CTA to be governed by the laws of England and Wales, which typically uphold parties’ autonomy and freedom of contract and can provide predictability to contractual arrangements. This is a good alternative, for example, to New York law, should the counterparty be unwilling to agree US law.
- Dispute resolution clauses: Parties should carefully consider whether disputes relating to the clinical trial should ultimately be resolved through the courts or by arbitration. There are distinct advantages and disadvantages to each that should be considered in the context of the CTA and the position of the parties. The parties should also consider escalation clauses, requiring attempts to resolve disputes by dialogue between senior management, and even a mediation, prior to commencing formal proceedings.
- Data protection: Given that healthcare data will likely be afforded higher protection under most legal regimes, getting the data protection clauses right in CTAs is increasingly important. This should include consideration of patients’ voluntary consent and anonymisation of data. Parties should also ensure that the data transparency requirements of the CTR are complied with in respect of pre-clinical and clinical trial data.