Pfizer and Moderna may not be as protected as they thought.

I first want to say, I am not a lawyer, but I do have a pretty good understanding for litigation, so please keep this in mind as you read this.

Both Pfizer and Moderna had an indemnification clause in their contracts that is to protect them from being held liable if damages were to occur through the use of their mRNA vaccines. To most, including myself thought this would avoid them from having to pay and be held accountable. This topic has been talked about on many occasions, and so far, nothing has been brought forward to challenge these clauses in the contracts they got most governments to sign. I thought I would approach this not from the optics of these specific contracts, but more from a general contractual focus and what I discovered was Pfizer and Moderna may not be that protected as we see the injuries clime and the unexplained deaths rise.

This paragraph has been sourced from one of the leaked contracts and from what I have learned, is more than likely the same clause that is in all of their vaccine contracts signed with all the governments during operation warp speed.

Indemnification by Purchaser. Purchaser hereby agrees to indemnify, defend and hold harmless Pfizer, BioNTech, each of their Affiliates, contractors, sub-contractors, licensors, licensees, sub-licensees, distributors, contract manufacturers, services providers, clinical trial researchers, third parties to whom Pfizer or BioNTech or any of their respective Affiliates may directly or indirectly owe an indemnity based on the research, development, manufacture, distribution, commercialization or use of the Vaccine, and each of the officers, directors, employees and other agents and representatives, and the respective predecessors, successors and assigns of any of the foregoing (“Indemnitees”), from and against any and all suits, claims, actions, demands, losses, damages, liabilities, settlements, penalties, fines, costs and expenses (including, without limitation, reasonable attorneys’ fees and other expenses of an investigation or litigation), whether sounding in contract, tort, intellectual property, or any other theory, and whether legal, statutory, equitable or otherwise (collectively, “Losses”) arising out of, relating to, or resulting from the Vaccine, including but not limited to any stage of design, development, investigation, formulation, testing, clinical testing, manufacture, labeling, packaging, transport, storage, distribution, marketing, promotion, sale, purchase, licensing, donation, dispensing, prescribing, administration, provision, or use of the Vaccine.

What I have since been able to discover is the following. For an Indemnification clause to be legally supported generally requires at least a conclusion that both Pfizer and Moderna acted in good faith and reasonably believed that their conduct was in, or at least not contrary to, the best interests of the corporation. One of the many questions that may need to be answered, does misconduct by one insured trigger an exclusion for all insureds? Also absent from the clause are words like all (or any, every, no matter what, regardless of cause, etc. are what can truly lock down such a clause.

The Pfizer contracts does however contain worrisome contractual language that states the purchaser, your government, agrees to indemnify, defend and hold harmless Pfizer. Indemnity clauses may include any, or all, of three distinct obligations, including to (1) indemnify, (2) defend, and (3) hold harmless the client.  Indemnify means to reimburse your client following a loss. Defend” means to pay the client’s legal expenses as it defends itself against a third-party claim. Hold harmless may have different meanings but most generally is understood to be your agreement to protect the client against harm from suits by either third parties or yourself. If you agree to defend your client, you may incur your client’s defense costs as it defends itself against a third-party claim, and you may find that your insurance will not cover those costs. To the extent your obligation to pay these defense costs is based only on your contractual commitment and not common law, you carrier will likely assert that the contractual liability exclusion of the policy excludes these costs from coverage. This is important to remember.

No matter how innocuous an indemnity clause may appear, if it is required Pfizer is to defend itself for any reason, it may create uninsurable losses for the customer, which in this case, the governments who signed the contracts.

In most cases, where these clauses exist, it would be highly advisable to seek to strike language requiring you to provide contractual liability coverage in this manner. If this cannot be agreed to, then at a minimum the language should be amended to indicate that only limited contractual liability coverage is provided—meaning that your policy will contain an exclusion that provides a limited clarification of the contractual liability exclusion. This was not done; and therefore, the governments that signed these contracts are legally obligated to incur all costs and damages regardless or cause. This is an exceptionally bad clause that becomes interpreted by courts to indemnify Pfizer for 100 percent of the damages incurred by Pfizer. This creates uninsurable risk for the governments who signed and agreed to these contracts. The only out would be damages caused by the negligence of Pfizer could be covered by the insurance.

Due to the crisis before many governments who were facing strong political and public pressure to find a vaccine, it could be argued that companies like Pfizer and Moderna were in a position described as monopolistic that afforded them the approach of either take it or leave it and parties in greater need for the transaction eager to move closer to the dotted line of the dominant side’s uneven agreement.

It could be viewed that the indemnity clause relates to “normal “damages as a result of “normal” causes, however there is nothing that speaks to catastrophic liability between parties and their insurers. Indemnity clauses are widely misunderstood and may not always have the super-powers that some believe. But they clearly can be significant in re-allocating liability between contractual parties. The keys to making them effective are to be critical regarding what we are trying to achieve, clear as to what and who they cover and when, and coherent in relation to the contract as a whole.

Through court orders, FOIs, leaked or whistleblower, documents and testimony have surfaced that prove or strongly suggest that aspects of the vaccine trials were seriously “mismanaged” and that parties involved in vaccine trails had extreme pressures placed upon them. These pressures greatly impeded their ability to deliver achievable outcomes and deadlines during human trials that assessed the efficacy and safeness of the vaccines.         

With that said, I would hope there is wording within the contract that puts onus on Pfizer and Moderna to provide a “Safe”product, whereby all expected safety protocols and quality assurance measures were followed and no cutting of corners” occurred to meet unrealistic deadlines.

I would argue would indemnity clauses hold true when it can be proven that protocols were not followed that rendered the product “untested”for quality and safety. Does not indemnity hold true when all parties have performed in good faith? If reporting of the vaccine was not truthful as the outcomes of the trials, this would not be conduct of good faith and would breach the basic underpinnings of any contract, an all-bets-are-off scenario whereby the entire agreement would need to be relitigated.

For indemnification to be held up, the indemnitee must act in good faith whereby it could reasonably be believed that if all parties, acting in an “official capacity, “undertook the conduct in the best interests of both parties or at least not opposed to the best interests.

Perhaps then, both Pfizer and Moderna are not as protected as many feel they are from being held responsible for the massive adverse reactions, injuries and deaths.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s