Procurement of Covid-19 vaccines: why were legal liabilities transferred to the public sector

The recent release of the Covid-19 vaccine supply contract between the European Commission and Astra Zeneca has caused a political and media storm about vaccine production logistics and supply issues. A lesser noticed but controversial issue revealed by the contract is that of where ultimate liabilities should lie, which has potentially far-reaching consequences for the public purse. Many commercial contracts include so-called indemnity clauses hereby one party contractually agrees to cover liabilities incurred by the other. The European Commission accepted in Article 14 of the agreement an extremely broad indemnity of the manufacturer covering almost any and every defect imaginable whether that be the vaccine’s inherent characteristics, manufacturing / distribution, and storage issues, labelling errors or even problems due to administration of the vaccine. This is a potentially significant burden to place on the state, and ultimately taxpayers.