Advertising Standards Canada ("Ad Standards"), the national self-regulatory body that administers the Canadian Code of Advertising Standards (the "Code"), recently launched its new process for handling competitive complaints. The new Advertising Dispute Procedure (the "Dispute Procedure") came into effect on February 11, 2019.
Previously referred to as the "Trade Dispute Procedure", the Dispute Procedure is a confidential, fee-based resolution process for advertisers. Based on provisions of the Code, which set the criteria for acceptable advertising in Canada, Ad Standards' Dispute Procedure provides a streamlined method for resolving disputes between industry competitors outside the judicial system. Complaints sustained through the Dispute Procedure may result in the requirement to amend or withdraw advertising found to be in contravention of the Code. Failure by defendant advertisers to fully comply with a decision reached in pursuant to the Dispute Procedure will result in Ad Standards advising exhibiting media and notifying the Competition Bureau of this fact, and may result in Ad Standards identifying both parties in a published case summary.
The launch of the Dispute Procedure follows Ad Standards' consultation with industry and review of global self-regulatory advertising dispute procedures, in an effort to update and improve its complaints process. The Dispute Procedure incorporates several changes with a view to improving the efficiency, cost-effectiveness and practicality for handling advertiser-initiated complaints.
The Dispute Procedure consists of the following elements and notable updates:
- Pre-conditions – As a pre-condition to filing a complaint, the complainant advertiser must satisfy Ad Standards that they engaged in a good faith attempt to resolve the complaint with the other party. Ad Standards must also be of the opinion that there are reasonable grounds to proceed and be in receipt of the applicable fee.
- Voluntary Resolution – If a complaint is accepted, either party may request to convene a voluntary resolution meeting. This meeting, moderated by Ad Standards, is not held unless both advertisers agree to it. Previously, a resolution meeting was a mandatory component of the procedure's first stage resolution process.
- Written Submissions – Unless resolved during a resolution meeting, written submissions are filed by the complainant and defendant advertisers. As a departure from the previous procedure, which required advertisers to attend and present their arguments in person, no live hearing will be held. Instead, the parties' written submissions are the only materials that may be considered.
- Adjudication – A three-person, rather than five-person, panel will adjudicate the dispute on the basis of the complaint and formal written submissions filed. The panel will be chaired by a lawyer, while the remaining panellists will be drawn from the advertising and media sectors.
- Final Decision – Previously, the procedure allowed for the right to request leave to appeal from the adjudication panel's decision. Under the new Dispute Procedure, the panel's decision is final and non-appealable. Although decisions will continue to be confidential, Ad Standards may publish brief case summaries on its website without identifying the advertisers involved.
- Fees – Fees for the complaint and dispute process have been significantly reduced. Under the prior procedure, the first stage resolution and hearing fees could cost up to $12,000 and $15,750, respectively. Under the new Dispute Procedure, not including voluntary resolution, the filing and adjudication fees cost up to $2,000 and $8,500, respectively.
- Timing – Set timeframes for written submissions and replies will result in the adjudication of complaints within 32-37 working days.
In our view, the Dispute Procedure places an increased importance on the quality of written advocacy in preparing written submissions, which must be rooted in an erudite understanding of the Code and its interpretation. For this reason, it is important to vigilantly review recent case summaries in order to distill persuasive arguments that regularly sway the panel.