Welcome to the February issue of ‘p3 news’. This month, with the launch of our Creative Compliance Workshops, in association with Minter Ellison Lawyers, we’re looking at the Trade Practices Act guidelines and the issues that advertisers, their agencies and their legal counsellors need to address. p3 – helping people achieve commercial purpose through creative processAdd a colleague to the ‘p3 news’ mailing list, by emailing their details to firstname.lastname@example.org
The hot potato sticksRESPONSIBILITY OF ADVERTISING AGENCIES AND CORPORATE CLIENTS FOR CREATIVE COMPLIANCE
Sarah Barker, Solicitor, Minter Ellison LawyersIntroduction
Corporate advertisers have historically been reliant on their agents to construct promotions that are not only effective from a creative perspective, but are compliant with all relevant laws. However, until recently agents have rarely been prosecuted along with their clients for misleading or deceptive advertising under the Trade Practices Act. Now, the ACCC and the Federal Court have clearly indicated
that agencies and their clients must each take responsibility for creative compliance. The recent case against health insurer MBF and its advertising agency, John Bevins, sets down important principles in relation to the liability of advertising agencies for the misleading advertisements that they create for their clients. Perhaps just as importantly, this case highlights the importance of client-agent communication and dual responsibility, from brief to publication. The MBF case
The MBF advertisements promoted the benefits of its obstetrics hospital cover. The ACCC alleged that the advertisements misrepresented that benefits for obstetrics services would be immediately available to new members. In fact, such services were subject to a 12 month waiting period. This waiting period was disclosed, but in ‘fine print’. The Court held that that disclosure was given
insufficient prominence in the television and billboard versions of the advertisement.As a matter of substance, this case confirms that non-print advertisements will be assessed by reference to the impression immediately conveyed to a disinterested audience. It also clearly states the Court’s position on the role of ‘fine print’: to explain rather than qualify an offer, and serves as a timely reminder of the importance of choosing a medium appropriate to the particular message.However, the case is also significant in procedural terms, in the context of the relationship between corporate clients and their agencies. The Court held that John Bevins was ‘knowingly concerned’ with its client’s misleading advertisements. This was on the basis that it had knowledge of the essential facts that constituted the contravention, even though it was not consciously aware that those facts would give rise to breach. It was not relevant
that neither the agency nor its employees subjectively appreciated that the advertisements were false or misleading. The Court said: ‘In the advertising industry, advertising agents are ‘gatekeepers’ who have a responsibility to consider whether advertising material prepared by them for their clients, complies with consumer protection legislation’. Accordingly, the agency could not rely on the fact that legal sign-off had been given by MBF’s internal legal counsel, nor that its advertisements complied with the Federation of Australian Commercial Television Stations’
guidelines. This highlights the necessity for both the client and advertiser to take responsibility for each element of the creative process – from brief to publication. Whilst it has always been the responsibility of the corporate team to verify and candidly communicate all relevant terms and conditions of the offer to their agency, the Court has now made it clear that advertising agencies will be held responsible for their part in the manner in which information is
presented. The client will also remain responsible, and thus must remain vigilant in approving materials submitted by the agency.The challenge
The challenge for agencies, the corporate teams that they support and any lawyers involved, is to work cooperatively to strike the right balance between legal pedantry and marketing creativity. It is no longer feasible to act as separate elements in the process from production to publication. Astute agencies and their clients should not see this as stifling creativity, but a catalyst to innovative
thinking about the way communications are constructed.This memorandum is intended as a short summary of the MBF case. It should not be relied on as a complete discussion of those cases, nor of the law in relation to misleading or deceptive conduct in the context of broadcast advertising. Legal advice should be sought in respect of each individual promotion.
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The answer is eveyone. With Minter Ellison Lawyers, P3 provide a 2 hour interactive workshop to give your marketing and advertising team an understanding of how to operate within the guidelines of the Act. For more information, see our website at
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