Leading Ireland retailer Dunnes Stores was sued by Tesco over allegedly misleading price comparisons. The High Court refused Tesco’s demand for a quick court order stopping Dunnes’ claims, but the case underlines the limited rights UK businesses have in similar cases as confirmed by Conor Griffin of Duncan Grehan & Partners, Dublin.
Topic: Misleading marketing
Who: Tesco Ireland Limited –v- Dunnes Stores
Where: Irish High Court
When: December 2009
Law stated as at: 1 September 2010
The European Communities (Misleading and Comparative Marketing Communications) Regulations 2007 were enacted in Ireland in supplement to the Consumer Protection Act 2007 which established the National Consumer Agency and granted wide reaching protection to consumers. The 2007 Regulations extended some of that protection to businesses and brand owners and allowed them to pursue a complaint for misleading marketing practices against rivals.
In 2009 Tesco Ireland Limited sought an interlocutory court injunction under the 2007 Regulations against rival megastore group, Dunnes Stores. Tesco and Dunnes Stores are among Ireland’s largest supermarket chains. Tesco claimed that Dunnes’ advertisements which compared its promotional prices to Tesco’s standard prices misled customers by failing to compare like with like. They claimed the advertisements were in breach of the both the Consumer Protection Act, 2007 and the 2007 Regulations. Dunnes replied that the advertisements were accurate on the day of publication and, in the case of supermarkets, prices are ever changing.
The High Court held that under the 2007 Regulations it could only make a final Order on this and not grant an interim injunction. On the basis of the available evidence (which it felt was insufficient) it could not make a final Order and so it refused the application for an interim injunction. Tesco would have to pursue their complaint to a full trial action.
Why this matters:
Ireland differs from the UK and some other EU countries in providing a route for brand owners or businesses to make a claim against a rival’s marketing. Even though the application was dismissed at this stage for technical/procedural reasons, the option was left open to Tesco (or, by analogy, any other business owner seeking to take action) to take a full plenary action and to apply to transfer those proceedings to the Commercial Court for an early, fast-track trial within, typically, 10 weeks from transfer. Applications for such remedies can be made more cheaply to the Circuit Court in appropriate cases.
The 2007 Regulations allow the Court to make an Order imposing such terms and conditions on an offending trader as the Court feels are appropriate. This would generally include the withdrawal of the offending advertisement and publication of a corrective statement. The Court does not, however, have the power to make an award of damages although it can award legal costs to the successful party. A brand owner or business seeking damages would have to sue for passing off or infringement of a trade mark. The Consumer Protection Act, 2007 also allows for the imposition of fines in cases prosecuted by the National Consumer Agency or in actions taken by consumers.
Duncan Grehan & Partners, Dublin