Clearcast in Judicial Review Success

LONDON, May 17, 2016 /PRNewswire/ --

The High Court has ruled that Clearcast's decisions on television advertising preclearance are not subject to Judicial Review and that Clearcast was justified in requiring evidence to substantiate advertising claims even where an EC certificate had been granted. The Court confirmed Clearcast does not perform "functions of a public nature" and its decisions on advertisements are therefore not subject to Judicial Review. It also clarifies that claims for products certified under the European Medical Devices Directive are still subject to UK Advertising Codes.

The decision followed an application by Diomed Direct Limited who had sought to overturn a decision by Clearcast. In order to be successful Diomed had to persuade the Court that the decision of Clearcast, a private company, was subject to Judicial Review and that it had erred in its approach to clearing advertising for products regulated by the provisions of the EC Medical Devices Directive. Diomed's application was rejected by the Court on all counts.

This was the first time that the question of whether a decision by Clearcast is amenable to Judicial Review had been tested and the Court made a clear ruling that it was not. The Honourable Mr Justice Stewart stated:

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. … Clearcast assists with the broadcasters' functions. If a broadcaster decided not to approve an advertisement because of a risk of an adverse finding by the ASA that decision would not be susceptible to Judicial Review."

Diomed had sought Clearcast clearance for a proposed ad for its product Prevasore Everyday Lip Therapy, a Class IIb medical device. It wished to include a claim about the effects of Prevasore. Clearcast bases its decisions, as part of the preclearance service it offers of television advertising, on the UK Code of Broadcast Advertising (BCAP Code) and rulings made by the Advertising Standards Authority (ASA). The ASA had made clear in several prior rulings that it did not believe that the Medical Devices Directive harmonised the law relating to the advertising of medical devices and that the ASA assessed such marketing communications in the UK against the Advertising Codes. Based on the BCAP Code, the expected approach of the ASA and the assessment of an independent medical dermatologist, Clearcast asked for substantiation to support the Prevasore claim.

Diomed argued that since submitting the ad to Clearcast they had received EC certification for Prevasore; this had cleared the use of the claim on the packaging and therefore they should be able to include the claim in TV advertising without further substantiation. In view of previous ASA rulings which Clearcast felt were clear on this point, Clearcast disagreed and therefore was unable to recommend the submitted advertising which included this claim for broadcast on television.

Diomed applied to the Court for permission to apply for Judicial Review in January 2016. They raised five grounds, four of which centred on arguments that EU Law rendered additional scrutiny of claims unlawful or discriminatory with the fifth ground being based on freedom of expression. In a written decision, the Court rejected each of these arguments:

• Diomed argued that the effect of the Medical Devices Directive was to harmonise the regulation of the performance of medical devices and that EU law does not permit claims about the performance of medical devices to be subjected to further regulatory approval. The Court rejected this argument. The Court held that Clearcast only provided advice on the ASA's likely position. Clearcast's understanding is that the ASA does not regard the grant of an EC certificate in itself to be sufficient and requires evidence. The Court stated that in any event, Clearcast was not bound by the provisions of the Medical Devices Directive.
• Diomed argued that Clearcast's policy discriminated between certified medical devices (for which substantiation is required in the clearance process) and certified medicines and foods or food supplements in respect of which health or nutrition claims are made. Clearcast's position was that this difference in approach followed the decision making practice of the ASA and reflected the fact that the EU regime is different for these categories. The Court agreed with Clearcast, stating that "Unlike in the case of medical devices, the ASA's previous decisions on medicinal products/food supplements disclosed no comparable risk relating to performance claims for those products for which authorisation has been obtained under the Medicinal Products Directive or the Foods Regulations. ASA has basis for taking this view having regard to Article 87(2) of the Medicinal Products Directive and Article 10(1) and 20(2)(c) of the Foods Regulations." The Court went on to rule that in any event, the grant of the EC certificate after Clearcast's finding that the claims for Diomed's product were unsubstantiated was insufficient to deal with the points raised by Clearcast, such that there was objective justification for it to continue to require them to be addressed.
• Diomed argued that Clearcast's decision (refusing to accept the conclusion of a notified body certifying under the Directive as sufficient to substantiate the Prevasore claim) was disproportionate and/or irrational. The Court ruled that there was no arguable irrationality based on the points above and the assessment by Clearcast's independent dermatologist.
• Diomed argued that Clearcast's decision on this claim 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, not being an "Emanation of State". The Court further stated that it is not arguable that Clearcast has created any obstacle to the placing on the market or the putting into service of Diomed's product.
• Finally, Diomed argued that Clearcast's decision on the claim unjustifiably interfered with the Claimant's commercial free speech rights under Article 10 ECHR. The Court rejected this argument on several counts: that Clearcast was not a public authority pursuant to section 6(iii)(b) of the Human Rights Act 1998, Clearcast did not undertake "functions of a public nature", the decision did not materially interfere with Diomed's rights under Article 10(1) and in any case the decision was not to recommend the ad for broadcasting without Diomed providing appropriate material substantiating the claim. The Court ruled that any interference was proportionate.

Chris Mundy, Managing Director of Clearcast, said "We welcome this ruling which confirms that, in providing Broadcasters with copy clearance advice, we do not exercise statutory or public law power and are therefore not subject to Judicial Review".

Niamh McGuinness, Clearcast's Head of Copy Clearance, said "We work closely with advertisers and agencies to get compliant ads to air. It is disappointing that Diomed applied for permission to have our decision overturned as the rulings from the ASA on medical devices are very clear, however I'm pleased that the Court has ratified our approach".

ENDS

Notes for Editors

• Owned by the UK's four largest broadcasters, Clearcast are experts in advertising compliance and work with Advertising Agencies and Advertisers to get their ads to air by ensuring they won't mislead, cause harm or offend.
• Clearcast provide a range of services beyond copy clearance that provide a backbone to the audio-visual advertising industry.
• Visit http://www.clearcast.co.uk for more info about Clearcast.
• Clearcast were represented by Olswang LLP. The barristers were Brian Kennelly QC and Hanif Mussa from Blackstone Chambers.