In defence of the advertising lawyer

Why do you need a lawyer?

Why do you need a lawyer?

Many advertisers hate (okay, maybe ‘hate’ is too self-deprecating, at least they dislike strongly) having to submit their ads, promotions, labels, etc through ‘legal,’ due to fear that we might kill an exciting and innovative concept.

It’s not that we cannot appreciate that launching a product under a captivating name, claim or advertising concept enhances consumer demand. Or that being able to claim your product is the best on the market does miracles for the bottom line. It’s just that we, as advertising lawyers, are forced to contend with the myriad of legislation that directly impacts what advertisers can claim and how they can make their claims.

A good advertising lawyer will try to help you develop creative workarounds to get to a place where you as the advertiser can be happy, while remaining on the right side of the law.

The amount of legislation and number of self-regulations that impact advertisers are far too numerous to mention in this short column. But an awareness of the regulatory minutia that exist from industry to industry is critical to mitigate the risk of legal proceedings initiated by regulators, consumers or competitors.

While in some cases the advertiser may deem the level of risk acceptable for the potential reward of an advertisement, this assessment could not be made without at least knowing what the risks really are.

The most known obstacle that advertisers have to contend with is the general prohibition against ‘false and misleading’ advertising found in the Competition Act. Similar prohibitions are found across the country in provincial fair business legislation.

The risk that the regulators themselves will bring an action against the advertiser for violation is very real. The penalties for violators (depending on whether the regulators chose to prosecute the claim as a ‘reviewable matter’ or a criminal offence) are severe – If prosecuted as a criminal offence, the penalty can be prison up to five years and fine at discretion of the court. For reviewable matter under the Competition Act, requirement to publish notices, order not to engage in similar conduct and/or a fine of $100,000 for first offence and $200,000 for subsequent offences are possible.

Regulators are not the only source of attack. Consumers can lodge complaints against advertisers on the basis of an advertisement being in violation of the Canadian Code of Advertising Standards. An example of this might be a consumer perceiving an ad to depict unsafe or dangerous practices. The likelihood of this will obviously depend on a variety of factors, most importantly their passion for the issue.

On the other hand, the likelihood of a competitor raising a complaint is rarely called into question. Assume it will happen.

For instance, if a competitor feels an ad is misleading – even though it is not a comparative ad – it has many people who will listen. Competitors can complain to the Competition Bureau (whose mandate it is to enforce the Competition Act), Health Canada (if the product is a food, drug, cosmetic, or natural health product), Advertising Standards Canada or another regulator. If the ads are comparative, and damaging to a competitor’s sales, they can bring a Trade Dispute before Advertising Standards Canada, or possibly even launch legal proceedings on various grounds.

It’s the intricacies of specialized product advertising that raise the most red flags and have the most regulation by the government.

For instance, as I outlined in a previous column, food regulations have been revamped and once the transitional phase is over, they will severely restrict nutritional content and diet-related health claims for foods. Not only do the regulations address what can be said, they also mandate how things can be said.

For instance, ‘light’ claims must be accompanied by a qualifying statement, such as ’25% less fat than our regular ice cream’ and the qualifying statement must be immediately adjacent to the ‘light’ claim with no intervening print or graphic and must be in the same size type and prominence.

The Canadian Food Inspection Agency takes a hard-line approach in dealing with food claims and labels. It has been known to stop distribution of products and order recalls where it feels that a product is incorrectly labeled. This is obviously a costly and disruptive situation that most advertisers would prefer to avoid.

Cosmetics and over-the-counter drugs are also severely regulated, and the legal review of labels and advertising is vital to ensure that claims don’t cross any lines that would contravene the Food and Drugs Act. Guidelines have been issued to give advertisers a notion of what is and what is not acceptable, although obviously it has been impossible for the guidelines to address all possible claims. Direct-to-consumer drug advertising for prescription products is a whole other ball game, and communication pieces must be very carefully scrutinized to ensure that they do not cross over into the prohibited realm of prescription drug advertising.

And, then there are contests and other promotions. Any ad promoting such programs must ensure that the offer being tendered to consumers (because effectively that is what the advertisement amounts to) includes all relevant terms and conditions. You most definitely do not want to be faced with a class-action lawsuit for failure to advise consumers of relevant restrictions in a promotion. For contests, the minimum disclosure requirements of the Competition Act and its guidance bulletins must also be met.

So lawyers are key to your business. Don’t shoot the messenger: We don’t create the legislation, we just interpret it. Our goal is to ensure that your ads, products and promotions launch without any legal hitches, and as closely as possible to your initial creative spark.

Good advertising lawyers will not just look for obstacles, they will help to develop solutions.

Shelley Samel is an advertising and marketing lawyer at Gowling Lafleur Henderson LLP in Toronto. She can be reached at shelley.samel@gowlings.com.