This article was first published on Lexis®PSL Commercial on 6 June 2016. Click for a free trial of Lexis®PSL.
Who: Diomed Direct Ltd and Clearcast
Where: The High Court, London
When: May 2016
Law stated as at: 9 June 2016
In the UK, broadcasters must not air advertisements that are misleading, harmful or offensive. Clearcast was therefore created to pre-vet and clear broadcast advertising before it can be scheduled for airing and it seeks to ensure all TV ads comply with the UK Code of Broadcast Advertising (the “BCAP Code”) on behalf of the broadcasters. Clearcast is a private company, owned by the four largest UK broadcasters, which has no statutory foundation or authority and operates within the advertising world of industry self-regulation.
Diomed Direct Limited (“Diomed”) submitted an ad to Clearcast for clearance which related to its Prevasore Everyday Lip Therapy (which is classified as a Class IIb medical device). Diomed wanted to make certain claims about the performance of the product in the TV ad which mirrored claims made on the product’s packaging. When applying the provisions of the BCAP Code to the claims and considering both the expected approach of the Advertising Standards Authority (“ASA”) and the assessment of an independent medical dermatologist where the claims were concerned, Clearcast asked for Diomed for further substantiation to support the claims. All reports suggest that Diomed argued that as they had received EC certification for Prevasore under the EC Medical Devices Directive (the “Directive”), they should be able to include the claims permitted for their packaging in TV advertising without having to provide further substantiation to Clearcast.
Clearcast disagreed and would not clear the ad without such substantiation so refused clearance. Diomed responded by applying to the High Court for Judicial Review to overturn Clearcast’s decision. Diomed had to persuade the High Court that Clearcast was actually subject to Judicial Review and then, that Clearcast had erred in its approach to clearing advertising for products regulated by the provisions of the EC Medical Devices Directive.
High Court decisions
1. Was Judical Review available to Diomed?
This was the first time that the question of whether a decision by Clearcast is potentially subject to Judicial Review had been tested. Diomed’s application was rejected by the High Court. The Honourable Mr Justice Stewart held that Clearcast “…exercises no statutory/public law power; nor does it exercise any public law function. The fact that private arrangements are used to secure public law objectives is insufficient.”. It was decided that Clearcast simply assists with broadcasters’ functions and if a broadcaster decided not to approve an advertisement because of a risk of an adverse finding by the ASA due to a lack of BCAP Code compliance, then that decision would not be susceptible to Judicial Review.
2. Did Clearcast’s policy discriminate between certified medical devices and certified medicines and foods or food supplements?
Clearcast’s position was that its difference in approach where such products, claims and substantiation were concerned, followed the decision making practice of the ASA and reflected the fact that the EU regime is different for these categories of products also. The Court agreed with Clearcast.
3. Was Clearcast’s refusal to accept the conclusion of a notified body certifying under the Directive as sufficient to substantiate the Prevasore claims disproportionate and/or irrational?
The Court ruled that there was no arguable irrationality based on its assessment of applicable regulations and the assessment by Clearcast’s independent dermatologist.
4. Did Clearcast’s decision breached the obligation in Article 4 of the Medical Devices Directive not to create any obstacle to the placing on the market of devices bearing the CE marking indicating they have been assessed for conformity in accordance with that Directive?
The Court ruled that Clearcast is not bound by this Article as it is not an “Emanation of State” and no such obstacles had been created.
5. Did Clearcast’s decision unjustifiably interfere with the Claimant’s commercial free speech rights under Article 10 European Convention of Human Rights?
Again the Court rejected this argument on several counts including that Clearcast was not a public authority pursuant to the Human Rights Act 1998 and, in any event, Clearcast’s decision did not materially interfere with Diomed’s rights. Even if it had done, the Court was of the opinion that any such interference was proportionate.
Why this matters:
It has often been queried and debated whether an advertiser, whose broadcast ad does not pass the clearance tests of Clearcast, could in effect appeal their decision through the route of Judicial Review. That theory has now been tested and the outcome is clear – Judicial Review is not an avenue open to advertisers.
The High Court decision was also interesting as it confirmed the position regarding the clearance of medical device claims. It is understood that, amongst other things, Diomed argued that the effect of the EC Medical Devices Directive was to harmonise regulation of the performance of medical devices and so therefore such devices could not be subject to further regulatory approvals – hence their dissatisfaction at Clearcast’s requests that they provide further substantiation to evidence the claims they wanted to make in their ad. The court clarified that Clearcast was not bound by the EC Medical Devices Directive – its remit is to focus on the BCAP Code and the requirements of the Advertising Standards Authority only when it is clearing TV ads.
So what does this mean in practice? Well, advertisers and their agencies need to ensure that they have properly thought through whether a proposed ad is compliant with the BCAP Code before they approach Clearcast. Each claim made in an ad (whether expressly or implied) needs to adhere to the provisions of the BCAP Code and the advertiser is required to have all necessary substantiation to evidence the claims made. The owners of medical devices also have further confirmation now that the EC Medical Devices Directive and UK advertising laws and regulations are distinct, with different requirements where certain claims are concerned, and so both need to be taken into account when advertising claims are crafted. Obtaining certification for a particular claim under the Directive does not mean that claim will then be automatically permissible under the requirements of the BCAP Code or other laws and regulations in this space. The High Court made it clear that Clearcast was justified in requiring evidence to substantiate advertising claims even where an EC certificate had been granted.