Misleading advertising

Is the British Code of Advertising all I need to worry about if I publish a misleading advertisement?
No. A number of statutes and regulations make it a criminal offence to publish misleading ads, while the Control of Misleading Advertisements Regulations 1988 can lead to "misleading" advertisers being injuncted against further use of offending advertising. Misleading ads can also lead to civil liability for damages.

When can being misleading in ads lead to legal bother?
We will not attempt to give an exhaustive list here, but here are a few for starters.

Broad nature of criminal offence/legal wrong Source of relevant law
Misleading price indication Consumer Protection Act 1987
False indication regarding goods or services Trade Descriptions Act 1968
Misleading advertising of medicinal products 1994 Medicines (Advertising) Regulations
Misleading food advertising Food Safety Act 1990
Misleading investment advertisements Financial Services Act 1986
Trade mark infringement in misleading comparative advertising Trade Marks Act 1994
Liability for civil damages for misrepresentation/breach of contract Misrepresentation Act 1967 and contract law

Who operates the 1988 Control of Misleading Advertisements Regulations?
The Office of Fair Trading in relation to print advertising, the ITC for TV ads and the Radio Authority for radio advertising.

How are the 1988 Regulations triggered?
For print advertising, the Regulations can be brought into play by complaints to the Office of Fair Trading by either the Advertising Standards Authority, a competitor of the advertiser or a consumer. For broadcast advertising the ITC or as appropriate the Radio Authority may take action following receipt of a complaint from a competitor of the advertiser or the consumer. They may also take action of their own motion as can the Office of Fair Trading.

What is a misleading advertisement?
The Regulations stipulate that an advertisement will be regarded as misleading if in any way, including its presentation, it deceives or is likely to deceive the persons to whom it is addressed or whom it reaches and if, by reason of its deceptive nature, it is likely to affect the economic behaviour or, for those reasons, is likely to injure a competitor of the person whose interests the advertisement seeks to promote.

In what circumstances will action under the 1988 Regulations be contemplated?
In the case of printed advertising the Office of Fair Trading must first of all persuade itself that all the "established means" (i.e. the self-regulatory Committee of Advertising Practice/Advertising Standards Authority control system) of controlling the advertising in question have been bought to bear on substantially the same advertising, yet still it continues to be published. In the case of broadcast advertising the ITC (TV)  and the Radio Authority are in any event the "established means" controlling the advertising in question so they must simply be satisfied that the complaint in question is not frivolous or vexatious before taking the matter further.

What action can be taken under the 1988 Regulations?
If, in the case of printed advertising, the Office of Fair Trading is satisfied that existing established means have failed to control the ad, it may if it considers it appropriate, apply to the court for an injunction preventing further use of the advertising in question. The injunction granted may relate to the particular advertisement which precipitated the court application or any similar ad. No proof of loss or damage to anyone or of any intent on the part of the person responsible is needed before an injunction will be granted. In the case of broadcast advertising the Radio Authority or the ITC may simply consider the complaint and, if they determine it appropriate to do so, forbid the networks they control from further use of the advertisement.

Have the 1988 Regulations been used very much?
Not a great deal. Competitors of advertisers putting out supposedly misleading advertising have from time to time fulminated against the advertising in correspondence with the OFT, but the OFT's hands are tied unless it can be shown that the existing (and in fact very effective) self-regulatory means of control of print advertising have failed to prevent the ad from being published.

Fortunately, in most cases this is what the self regulatory system has achieved, so the OFT has only applied to the court for an injunction in a handful of cases each year and then only in relation to "recidivist/fringe" advertisers such as those promoting "get rich in your spare time" type schemes and "lose weight in seconds" or "restores hair in 5 minutes"-type products.

Is there any particular point in the 1988 Regulations at all?
Since at bottom much of the self-regulatory CAP Code is to do with misleading advertising, the Regulations operate as a useful legal backstop to the voluntary system, but probably not a great deal more than this. All this could change, however, by 2001 (see the answer to the next question).

Are there any changes to the 1988 Regulations in prospect?
There certainly are. First of all, by Spring 2000 the Regulations will have to be significantly amended so as to extend their ambit to comparative advertising as well as misleading advertising. As described in more detail elsewhere on this site, this follows the EU directive on Comparative Advertising. The definition of "comparative advertising" is wide and the basic regime the directive introduces is that all comparative advertising is illegal unless it complies with all of no less than 7 golden rules. As if this were not enough, by January 2001 the UK must implement another EU directive, this time on injunctions for the protection of consumers' interests. This directive confers civil rights on consumer groups to apply to the courts for injunctions so as to protect consumer interests by enforcing the provisions of no less than 9 EU Directives which have consumer protection aspects. One of these directives is the misleading (and now also comparative) advertising directive, and the UK government has indicated that it is minded to implement the directive in such a way as to allow not only the Consumers Association but also any other consumer body which meets certain laid-down criteria to apply for injunctions in respect of offending ads. The Office of Fair Trading’s resources are limited and this may be one significant reason why the 1988 Regulations have not so far been operated to any great degree. Although it is very likely that those who fail in applications to the court for injunctions will have to pay the defending party's costs and their own, one wonders whether consumer groups might be able to command sufficient resources to make life much more interesting for advertisers come 2001!