HERBEX VINDICATED BY THE SUPREME COURT OF APPEAL
1. In 2014 Herbex, represented by Mr Shoot of Fluxmans Inc Attorneys, instituted proceedings in the High Court of South Africa, Johannesburg against the Advertising Standards Authority (“the ASA”), a non-profit company masquerading as an organ of state and which had falsely claimed to be a statutory regulator purportedly mandated by the Medicines Control Council (“MCC”) to regulate amongst other things, medicine, complementary medicine and foodstuff advertising.
2. Herbex was successful in the High Court application and in May 2016, the High Court in its Judgment, essentially found that the ASA had misleadingly, claimed to have received authority from the MCC to regulate medicine advertising. The High Court further made an Order essentially:
2.1 declaring that the ASA has no jurisdiction over any person or entity who is not a member of the ASA and that the ASA may not in the absence of a submission to its jurisdiction require non-members to participate in its processes, issue any instruction, order or ruling against the non-member or sanction it ;
2.2 directing the ASA to include in its standard letters of complaint to non-members a reference to the fact that in the absence of a submission to its jurisdiction, it, the ASA, has no jurisdiction to adjudicate the complaint and that such non-member is not bound to participate in the ASA processes;
2.3 ordering the ASA to pay Herbex’s costs of the High Court litigation, including the costs of two Counsel.
3.The ASA appealed the High Court Order essentially on the basis that it was overly broad. The Supreme Court of Appeal delivered its Judgment on 29 September 2017. As appears therefrom the parties agreed on an Order (save in regard to the issue of costs) to be made by the SCA essentially [emphasis added] :
3.1 declaring that the ASA has no jurisdiction over any person or entity who is not a member of the ASA and that the ASA may not, in the absence of a submission to its jurisdiction, require non-members to participate in its processes, issue any instruction, order or ruling against the non-member or sanction it ;
3.2 the ASA was directed to include in its standard letter of complaint inter alia the aforesaid and that a non-member is not obliged to participate in any ASA process.
4. The only outstanding issue in the appeal before the SCA was the question of costs. The SCA vindicated Herbex by expressly finding that “The court a quo (High Court JHB) was undoubtedly correct in holding that in the absence of a submission to its jurisdiction the ASA has no jurisdiction over non-members and could not require them to participate in its processes. The respondent (Herbex) was substantially successful and consequently, there is no basis to interfere with the court a quo directing the ASA to pay the costs of that application, which include the costs of two Counsel.” Each party was directed to pay their own costs in regard to the appeal.
5. In addition, it is relevant to note that the Department of Health previously confirmed: “The MCC (The Medicines Control Council) does not have a formal relationship with the ASA. The statement that the ASA is managing the Marketing Code on behalf of the MCC is therefore incorrect”.
6. Herbex is relieved that the ASA finally conceded that it has no jurisdiction over any person or entity who is not a member of the ASA, that its private rulings which it issues to its members (the ASA incidentally only has 9 members) are not binding on non-members and the ASA may not :
(i) require non-members to participate in its processes ;
(ii) issue any instruction ;
(iii) order ; or
(iv) ruling against non-members ; or
(v) sanction non-members.
Herbex is also delighted that the ASA has been directed to amend its standard letters of complaint to non-member advertisers to advise them of the aforesaid. This will prevent non-member advertisers being misled by the ASA in the future. Indeed, as appears from the SCA Judgment, “ … non-members such as Herbex are legally entitled to ignore the rulings and procedures of the ASA” and such “Rulings are not legally enforceable against non-members.”
7. Hopefully this will bring an end to the ASA’s until now, unlawful assertion of jurisdiction, issuing of instructions, orders, rulings and sanctions against non-members.