You must write an answer to the problem-type question below, using the ILAC (Issues, Law, Application, Conclusion) format, a worked example of which is in the Resources folder. 

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Betapharm Ltd is a large pharmaceutical company. Its latest drug is THX 1138, which is designed to remedy colds. The active ingredient of THX 1138 is selladol. Each table is supposed to have 0.1 g of selladol in it. Unfortunately, Betapharm’s chief production officer misread the specifications for the chemical mix when the factory made the first batch of drugs. As a result, each THX 1138 tablet contained 1 g of selladol – in other words ten times as much as it should have. Scientific evidence shows that any selladol dose above 0.2 g will produce severe dizziness, headaches and seizures, although these symptoms always wear off after a few hours.

Alice bought a box of THX 1138 tablets and took one when she began to feel a cold coming on. She took a tablet and 30 minutes later, while driving home, she suddenly developed a dizziness and a blinding headache which in turn led to a seizure, causing her to crash her car. She suffered severe injuries, including losing an arm which was severed. Bob was standing next to the kerb when Alice crashed her car, and saw Alice’s arm being cut off. As a result, Bob suffers a nervous breakdown, incurs medical expenses, and cannot run his handicrafts business for two weeks.

News of the effects of THX 1138 spreads quickly. As soon as it discovers what has happened, Betapharm puts out an alert in the newspapers, on TV and on social media recalling the drug, explaining its side effects and telling people not to take it. Dan, who is an accountant, reads one of the newspaper adverts. The next day he begins to feel a cold coming on. His wife sees him reach for a box of THX 1138 and says to him ‘Isn’t that the medication that causes terrible headaches?’ Dan says that his nose is so blocked up that he will take the tablet anyway. He develops a severe headache and nausea and cannot go into work, losing a day’s income as a result. One of Dan’s clients whose appointment that day is cancelled is Elizabeth. That day was the deadline for her to sell her business to a buyer who had set the condition of having a fully set of audited accounts given to him by Elizabeth. Because Dan is unable to complete the audit, Elizabeth loses the sale and the profit of $ 1 million she would have made.

Assume that you have been asked to advise Betapharm Ltd on the extent to which it is liable to each of the potential plaintiffs mentioned in the facts. You must use the ILAC method and must give authority for the legal principles you rely on.

In answering this question, you should restrict your research to the law covered in Topics 3 and 4 only.

As with all problem-type questions, you should assume that all facts alleged are true and are provable in court.