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STATUTORY INSTRUMENTS
1988 No. 915
CONSUMER PROTECTION
The
Control of Misleading Advertisements Regulations 1988
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Coming into force
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20th June 1988
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Whereas the Secretary of
State is a Minister designated[1]for the
purposes of section 2(2) of the European Communities Act 1972[2] in relation to measures relating to the
control of advertising;
And whereas a draft of
these Regulations has been approved by a resolution of each House of
Parliament pursuant to section 2(2) of and paragraph 2(2) of Schedule 2 to
that Act;
Now, therefore, the
Secretary of State in exercise of the powers conferred on him by section
2(2) of that Act and of all other powers enabling him in that behalf hereby
makes the following Regulations:
Citation and commencement
1. These
Regulations may be cited as the Control of Misleading Advertisements
Regulations 1988 and shall come into force on 20th June 1988.
Interpretation
2.—(1) In
these Regulations—
"advertisement"
means any form of representation which is made in connection with a trade,
business, craft or profession in order to promote the supply or transfer of
goods or services, immovable property, rights or obligations;
"broadcast
advertisement" means any advertisement included or proposed to be
included in any programme or teletext
transmission broadcast by the IBA and includes any advertisement included or
proposed to be included in a licensed service by the reception and
immediate re-transmission of broadcasts made by the IBA;
"Cable
Authority" means the authority mentioned in section 1(1) of the Cable
and Broadcasting Act 1984[3];
"court", in
relation to England and Wales and Northern
Ireland, means the High Court, and, in relation to Scotland,
the Court of Session;
"Director"
means the Director General of Fair Trading;
"IBA" means
the Independent Broadcasting Authority mentioned in section 1(1) of the Broadcasting
Act 1981[4];
"licensable
service" has the meaning given by Section 2(2) of the Cable and
Broadcasting Act 1984;
"licensed
service" means a licensable service in respect of which the Cable
Authority has granted a licence pursuant to
section 4 of the Cable and Broadcasting Act 1984;
"publication"
in relation to an advertisement means the dissemination of that
advertisement whether to an individual person or a number of persons and
whether orally or in writing or in any other way whatsoever, and "publish"
shall be construed accordingly.
(2) For the purposes of these
Regulations an advertisement is 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 their economic behaviour or,
for those reasons, injures or is likely to injure a competitor of the
person whose interests the advertisement seeks to promote.
(3) In the application of these
Regulations to Scotland
for references to an injunction or an interlocutory injunction there shall
be substituted references to an interdict or an interim interdict
respectively.
Application
3.—
(l) These
Regulations do not apply to—
(a) the following
advertisements issued or caused to be issued by or on behalf of an authorised person or appointed representative, that is
to say—
(i) investment advertisements; and
(ii) any
other advertisements in respect of investment business, except where any such
advertisements relate exclusively to any matter in relation to which the authorised person in question is an exempted person;
and
(b) advertisements
of a description referred to in section 58(1)9d) of the Financial Services
Act 1986[5], except where any such
advertisements consist of or any part of the matters referred to in section
58(1)(d)(ii) of that Act as being required or
permitted to be published by an approved exchange under Part V of that Act.
(2) In this
regulation "appointed representative", "approved
exchange", "authorised person",
"exempted person", "investment advertisement" and
"investment business" have the same meanings as in the Financial
Services Act 1986.
Complaints to the Director
4.—(1) Subject
to paragraphs (2) and (3) below, it shall be the duty of the Director to
consider any complaint made to him that an advertisement is misleading,
unless the complaint appears to the Director to be frivolous or vexatious.
(2) The Director shall not consider any
complaint which these Regulations require or would require, leaving aside
any question as to the frivolous or vexatious nature of the complaint, the
IBA or the Cable Authority to consider.
(3) Before considering any complaint
under paragraph (1) above the Director may require the person making the
complaint to satisfy him that—
(a) there
have been invoked in relation to the same or substantially the same
complaint about the advertisement in question such established means of
dealing with such complaints as the Director may consider appropriate,
having regard to all the circumstances of the particular case;
(b) a
reasonable opportunity has been allowed for those means to deal with the
complaint in question; and
(c) those means have not dealt with the complaint adequately.
(4) In exercising the powers conferred
on him by these Regulations the Director shall have regard to—
(a) all the
interests involved and in particular the public interest; and
(b) the desirability of encouraging the control, by
self-regulatory bodies, of advertisements.
Applications to the Court by the
Director
5.—(1) If, having considered a complaint about an
advertisement pursuant to regulation 4(1) above, he considers that the
advertisement is misleading, the Director may, if he thinks it appropriate
to do so, bring proceedings for an injunction (in which proceedings he may
also apply for an interlocutory injunction) against any person appearing to
him to be concerned or likely to be concerned with the publication of the
advertisement.
(2) The Director shall give reasons for
his decision to apply or not to apply, as the case may be, for an
injunction in relation to any complaint which these Regulations require him
to consider.
Functions of the Court
6.—(1) The
court on an application by the Director may grant an injunction on such
terms as it may think fit but (except where it grants an interlocutory
injunction) only if the court is satisfied that the advertisement to which
the application relates is misleading. Before granting an injunction the
court shall have regard to all the interests
involved and in particular the public interest.
(2) An injunction may relate not only to
a particular advertisement but to any advertisement in similar terms or
likely to convey a similar impression.
(3) In considering an application for an
injunction the court may, whether or not on the application of any party to
the proceedings, require any person appearing to the court to be
responsible for the publication of the advertisement to which the
application relates to furnish the court with evidence of the accuracy of
any factual claim made in the advertisement. The court shall not make such
a requirement unless it appears to the court to be appropriate in the
circumstances of the particular case, having regard to the legitimate
interests of the person who would be the subject of or affected by the
requirement and of any other person concerned with the advertisement.
(4) If such evidence is not furnished to
it following a requirement made by it under paragraph (3) above or if it
considers such evidence inadequate, the court may decline to consider the
factual claim mentioned in that paragraph accurate.
(5) The court shall not refuse to grant
an injunction for lack of evidence that—
(a) the
publication of the advertisement in question has given rise to loss or
damage to any person; or
(b) the person responsible for the advertisement intended it
to be misleading or failed to exercise proper care to prevent its being
misleading.
(6) An injunction may prohibit the
publication or the continued or further publication of an advertisement.
Powers of the Director to obtain and
disclose information and disclosure of information generally
7.—(1) For the purpose of facilitating the exercise
by him of any functions conferred on him by these Regulations, the Director
may, by notice in writing signed by him or on his behalf, require any
person to furnish to him such information as may be specified or described
in the notice or to produce to him any documents so specified or described.
(2) A notice under paragraph (1) above
may—
(a) specify
the way in which and the time within which it is to be complied with; and
(b) be varied or revoked by a subsequent notice.
(3) Nothing in this regulation compels
the production or furnishing by any person of a document or of information
which he would in an action in a court be entitled to refuse to produce or
furnish on grounds of legal professional privilege or, in Scotland, on the
grounds of confidentiality as between client and professional legal
adviser.
(4) If a person makes default in
complying with a notice under paragraph (1) above the court may, on the
application of the Director, make such order as the court thinks fit for
requiring the default to be made good, and any such order may provide that
all the costs or expenses of and incidental to the application shall be
borne by the person in default or by any officers of a company or other
association who are responsible for its default.
(5) Subject to any provision to the
contrary made by or under any enactment, where the Director considers it
appropriate to do so for the purpose of controlling misleading
advertisements, he may refer to any person any complaint (including any
related documentation) about an advertisement or disclose to any person any
information (whether or not obtained by means of the exercise of the power
conferred by paragraph (1) above).
(6) For the purpose of enabling
information obtained under certain enactments to be used for facilitating
the performance of functions under these Regulations, the following
amendments shall be made in provisions respecting disclosure of
information, that is to say—
(a) in
section 133 of the Fair Trading Act 1973[6]there
shall be inserted—
(i) at the end of paragraph (a) of subsection (2)
the words "the Control of Misleading Advertisements Regulations 1988
or";
(ii) at the
end of subsection (3) the words "or the Control of Misleading
Advertisements Regulations 1988";
(b) in
section 174 of the Consumer Credit Act 1974[7]there
shall be inserted—
(i) after the words "Consumer Protection Act
1987" in paragraph (a) of subsection (3) the words "or the
Control of Misleading Advertisements Regulations 1988";
(ii) after
the words "Fair Trading Act 1973" in paragraph (c) of subsection
(3) the words "or under the Control of Misleading Advertisements
Regulations 1988";
(c) in
section 41 of the Restrictive Trade Practices Act 1976[8]there
shall be inserted—
(i) at the end of paragraph (a) of subsection (1)
the words "or the Control of Misleading Advertisements Regulations
1988";
(ii) after
the words "Fair Trading Act 1973" in paragraph (c) of subsection
(1) the words "or the Control of Misleading Advertisements Regulations
1988";
(d) in
section 10 of the Estate Agents Act 1979[9]there
shall be inserted—
(i) after the words "Consumer Protection Act
1987" in paragraph (a) of subsection (3) the words "or the
Control of Misleading Advertisements Regulations 1988";
(ii) after
the words "other enactments" in paragraph (c) of subsection (3)
the words "or subordinate legislation";
(e) in
section 19 of the Competition Act 1980[10]there
shall be inserted—
(i) after the words "the enactments" in
paragraphs (a) and (c) of subsection (2) the words "or subordinate
legislation";
(ii) after
the words "the enactments" in subsection (3) the words "and
subordinate legislation" and after the words "Consumer Protection
Act 1987" in that subsection the words "(k) the Control of
Misleading Advertisements Regulations 1988";
(f) in
section 101 of the Telecommunications Act 1984[11]there
shall be inserted—
(i) after the words "the enactments" in
paragraphs (b) and (d) of subsection (2) the words "or subordinate
legislation";
(ii) after
the words "the enactments" in subsection (3) the words "and
subordinate legislation" and after the words "Consumer Protection
Act 1987" in that subsection the words "(i)
the Control of Misleading Advertisements Regulations 1988";
(g) in
section 74 of the Airports Act 1986[12]there
shall be inserted—
(i) after the words "the enactments" in
paragraphs (a) and (c) of subsection (2) the words "or subordinate
legislation";
(ii) after
the words "the enactments" in subsection (3) the words "and
subordinate legislation" and after the words "Consumer Protection
Act 1987" in that subsection the words "(j) the Control of
Misleading Advertisements Regulations 1988";
(h) in
section 42 of the Gas Act 1986[13]there shall
be inserted—
(i) after the words "the enactments" in
paragraphs (b) and (e) of subsection (2) the words "or subordinate
legislation";
(ii) after the words "the enactments" in subsection
(3) the words "and subordinate legislation" and after the words
"Consumer Protection Act 1987" in that subsection the words
"(k) the Control of Misleading Advertisements Regulations 1988".
(7) Subject to paragraph (5) above, any
person who knowingly discloses, otherwise than for the purposes of any
legal proceedings or of a report of such proceedings or the investigation
of any criminal offence, any information obtained by means of the exercise
of the power conferred by paragraph (1) above without the consent either of
the person to whom the information relates, or, if the information relates
to a business, the consent of the person for the time being carrying on
that business, shall be guilty of an offence and liable on summary
conviction to imprisonment for a term not exceeding 3 months or to a fine
not exceeding Ł2,000 or to both.
(8) The Director may arrange for the
dissemination in such form and manner as he considers appropriate of such
information and advice concerning the operation of these Regulations as may
appear to him to be expedient to give to the public and to all persons
likely to be affected by these Regulations.
Complaints to the IBA
8.—(1) It
shall be the duty of the IBA to consider any complaint made to it that a
broadcast advertisement is misleading, unless the complaint appears to the
IBA to be frivolous or vexatious.
(2) The IBA shall give reasons for its
decisions.
(3) In exercising the powers conferred
on it by these Regulations the IBA shall have regard to all the interests
involved and in particular the public interest.
Control by the IBA of misleading
advertisements
9.—(1) If,
having considered a complaint about a broadcast advertisement pursuant to
regulation 8(1) above, it considers that the advertisement is misleading,
the IBA may, if it thinks it appropriate to do so, refuse to broadcast the
advertisement.
(2) The IBA may require any person
appearing to it to be responsible for a broadcast advertisement which the
IBA believes may be misleading to furnish it with evidence as to the
accuracy of any factual claim made in the advertisement. In deciding
whether or not to make such a requirement the IBA shall have regard to the
legitimate interests of any person who would be the subject of or affected
by the requirement.
(3) If such evidence is not furnished to
it following a requirement made by it under paragraph (2) above or if it
considers such evidence inadequate, the IBA may consider the factual claim
inaccurate.
Complaints to the Cable Authority
10.—
(l) Subject
to paragraph (2) below, it shall be the duty of the Cable Authority to consider
any complaint made to it that any advertisement included or proposed to be
included in a licensed Service is misleading, unless the complaint appears
to the Authority to be frivolous or vexatious.
(2) The Cable
Authority shall not consider any complaint about an advertisement included
or proposed to be included in a licensed service by the reception and
immediate re-transmission of broadcasts made by the IBA or the British
Broadcasting Corporation.
(3) In exercising the powers conferred
on it by these Regulations the Cable Authority shall have regard to all the
interests involved and in particular the public interest.
Control by the Cable Authority of
misleading advertisements
11.—(1) If, having considered a complaint about an
advertisement pursuant to regulation 10(1) above, it considers that the
advertisement is misleading, the Authority may, if it thinks it appropriate
to do so, exercise the power conferred on it by Section 15(1) of the Cable
and Broadcasting Act 1984 (power to give directions) in relation to the
advertisement.
(2) The Authority shall give reasons for
its decision to give or not to give, as the case may be, a direction in
accordance with paragraph (1) above in any particular case.
(3) The Authority may require any person
appearing to it to be responsible for an advertisement which the Authority
believes may be misleading to furnish it with evidence as to the accuracy
of any factual claim made in the advertisement. In deciding whether or not
to make such a requirement the Authority shall have regard to the
legitimate interests of any person who would be the subject of or affected
by the requirement.
(4) If such evidence is not furnished to
it following a requirement made by it under paragraph (3) above or if it
considers such evidence inadequate, the Authority may consider the factual
claim inaccurate.
John ButcherParliamentary Under-Secretary of
State,
Parliamentary Under-Secretary of State, Department of Trade and Industry
23rd May 1988
EXPLANATORY
NOTE
(This note is not part of the Regulations)
These Regulations
implement Council Directive No. 84/450/EEC (OJ No. L 250 19.9.1984, p. 17)
relating to misleading advertising.
The Director General of
Fair Trading is required to consider complaints (other than frivolous Or
vexatious ones) about misleading advertisements. The Director is not
required to consider complaints about commercial radio or television
advertisements or cable advertisements. Before he considers a complaint the
Director may require the person making the complaint to satisfy him that
appropriate means of dealing with the complaint have been tried and that,
despite being given a reasonable opportunity to do so, those means have not
dealt with the complaint adequately. (Such means might include complaining
to a local authority trading standards department or to a self-regulatory
body, such as the Advertising Standards Authority. It is, however, for the
Director to determine what means he considers appropriate in any particular
case.) In dealing with complaints the Director is required to bear in mind
all the interests involved, including, in particular, the public interest,
and the desirability of encouraging the control, by self-regulatory bodies,
of advertisements (regulation 4).
The Director is given
power to bring proceedings for an injunction to prevent the publication or
continued publication of an advertisement which he considers misleading. He
is required to give reasons for his decision to bring or not to bring
proceedings for an injunction (regulation 5).
The IBA is placed under
a similar duty to consider complaints about commercial radio and television
advertisements. It is required to give reasons for its decisions and in
exercising its powers under the Regulations, to have regard to all the
interests involved and, in particular, the public interest (regulation 8).
The IBA may refuse to
broadcast an advertisement which it thinks is misleading. It may also
require, having regard to the interests affected by the requirement, substantiation
of factual claims in advertisements. Failing substantiation of them, it may
treat such claims as inaccurate (regulation 9).
The Cable Authority is
placed under a similar duty to consider complaints about misleading cable
advertisements, but is not to consider complaints about advertisements
included in IBA or BBC broadcasts where, after being received, those
broadcasts are immediately retransmitted by cable. The Authority is
required, in dealing with complaints, to bear in mind the same matters as
the IBA (regulation 10).
The Cable Authority is
given power to give directions (including a direction not to transmit it)
in relation to an advertisement which it thinks is misleading and is
required to give reasons for its decisions to give or not to give
directions. The Authority is given the same powers as the IBA in relation
to the substantiation of factual claims in advertisements and to treating
such claims as inaccurate (regulation 11).
The Court is given power
to grant applications by the Director General of Fair Trading for
injunctions preventing the publication of advertisements it considers
misleading, including advertisements likely to convey the same impression
as the advertisement to which the application relates. Where the
application is for an interlocutory injunction, the Court need not be satisfied that the advertisement is
misleading. The Court has the same powers to require substantiation of
factual claims and to treat them as inaccurate as are conferred on the IBA
and the Cable Authority. No proof of loss or damage to anyone or of intent
on the part of the person responsible for publishing an advertisement is
needed before the Court may grant an injunction (regulation 6).
Provision is made for
the obtaining and disclosure of information by the Director General of Fair
Trading and others and for the dissemination of information and advice by
the Director (regulation 7).
Various expressions used
in the Regulations, including "advertisement" and
"misleading advertisement", are defined (regulation 2).
The Regulations do not
apply to certain investment advertisements and advertisements in respect of
investment business as defined in the Financial Services
Act 1986 nor to advertisements which relate to the official listing
of Securities as provided for by Part IV of that Act (regulation 3).
The 1986 Act makes
separate provision in relation to those advertisements.
ISBN 0 11 086915 X
Notes:
[1] S.I. 1985/749
[2] 1972 c. 68
[3] 1984 c. 46
[4] 1981 c. 68
[5] 1986 c. 60
[6] 1973 c. 41
[7] 1974 c. 39
[8] 1976 c. 34
[9] 1979 c. 38
[10] 1980 c. 21
[11] 1984 c. 12
[12] 1986 c. 31
[13] 1986 c. 44
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