The brand challenge

The reluctance of the High Court in imposing advertising rules has led to calls for a special markets court.

Jeremy Fleming explores a creative industry where glossy image is everythingAdvertising may have been one of the first practice areas to be given a classification by legal directories when they sprang up in the 1980s - but in fact there is no such legal discipline as advertising law.'Perhaps they were just lazy and put it down because it was the first practice sector in the alphabet,' says Jeremy Courtenay-Stamp, head of advertising at City firm Macfarlanes.He says that although there has always been an understanding that advertising is a distinct area of legal practice, 'like many other sectors, there is actually no such thing as advertising law; there is just relevant law and practice'.

But if the description was unrealistic back then, advertising has grown into a flourishing practice area.

Roger Alexander, senior partner of Lewis Silkin, explains why: 'They're bright people, they're always doing things, ripping off material, always active, and they don't have many in-house lawyers.

They value commercial advice, they love recommending people to you for work - perfect.'Advertising is never far from the news, whether it be for the political furore over the government proving to be the country's biggest spender on advertising, or the Advertising Standards Authority (ASA) slapping down the attempts of the Daily Mail to lure away Daily Express readers.Macfarlanes, one of the big advertising beasts, created its practice on the back of work done for advertising agencies, and for Jaguar Racing and Ford Motor Company in connection with Formula One.Formula One, with its multi-billion dollar global income derived from sponsorship, television advertising and merchandising, is the perfect incarnation of an advertising-heavy industry.But it also exemplifies the journey that this flourishing practice area has made over the past decade.

Mr Courtenay-Stamp says ten years ago, Formula One was 'a bunch of petrol heads, now it's an organisation owned by the major motor manufacturers'.One of Macfarlanes' breaks came in 1995 when the firm acted for Jackie Stewart on his sale of the Stewart team to Ford.

Ford kept the firm on.Lewis Silkin's advertising history can be traced through the largest agency Abbott Mead Vickers, which it started working for in 1976.

The firm has guided the agency through its sale of 51% of its shares in 1978, its repurchase of the stock and subsequent flotation in 1985, its acquisition of fellow agency BBDO in the early 1990s, and its subsequent sale to BBDO's US parent company - for which the firm now acts - for 380 million in 1999.One of the reasons why advertising can be distinguished from other legal practice is the clients.

'There are only about 20 top advertising agencies and a handful of City firms is usually associated with the top work,' says Mr Courtenay-Stamp.Legal work is broadly divided between regulatory work and more general commercial advice, which increasingly involves employment, corporate, litigation, tax, and property departments.On the regulatory side, work may involve defending challenges to clients' advertising lodged with the ASA, responsible for posters and cinema advertising; the Broadcast Advertising Clearance Centre (responsible for television advertising); and the Independent Television Commission (ITC).Dealing with the regulators is 'not procedurally difficult', but more about 'knowing who to speak to so that you don't get lost, being sensible in identifying a real commercial problem', says Mr Courtenay-Stamp.Mr Alexander agrees: 'Yesterday I was chatting to two people from a big ad agency about a forthcoming launch; there was a divergence of view involving copyright, defamation and passing-off issues.

Where I added value wasn't in the legal knowledge, but in judgment.'Most decisions, he explains, are 'risk assessments', because 'there's rarely a right/wrong answer, and great advertising is always a little edgy, tapping into a raw nerve'.Mr Courtenay-Stamp says that branding is the big legal growth area.

Macfarlanes has its own brands practice that aims to respond to the different stages of branding.

He explains: 'We have different brands at different stages.

Jo Malone (a society perfumer) has recently sold her business to Este Lauder - who was interested in her because of the brand.

In that kind of business you need a name or an individual to make the brand work.' The same is true of another client, he says - David Linley, a furniture maker who happens to be the Queen's nephew.On the other side, he says, the firm's clients include Jaguar, Pepsi, Pizza Hut, Tropicana and Budweiser - all bigger brands which are not identified strongly with individuals.The increase in branding is symptomatic of what Mr Alexander describes as 'a general theme of concentration and globalisation across the sector.

With major groups coalescing, advertising campaigns are becoming much more international.'Globalisation is leading to more direct instruction by the advertisers rather than their agencies.

'They are looking for advice on European clearance for campaigns across the continent,' Mr Alexander explains.

There are rumours, according to Mr Alexander's colleague and fellow advertising specialist Brinsley Dresden, that a European directive dealing with advertising - which would synchronise advertising regulations across the continent - is planned.

Mr Dresden is ambivalent about this.

The differences in European regulations can give companies the opportunity to exploit the use the different complaints procedures across the continent to jam up a continent-wide advertising campaign.

Mr Dresden explains: 'I am currently acting for a big pet-food manufacturer launching a Europe-wide campaign.

I have liaised with colleagues working on the campaign in Europe recently, and we are all facing similar claims against us with regulators, lodged by a competitor in the pet-food world who is trying to break into the same market.' Despite the pitfalls, there are clearly advantages to local advertising standards being maintained.

Mr Alexander says that 'advertising is still very cultural', and the long-cherished goal of advertisers, to find the average that appeals across different European cultures, is still a long way off.For example, a recent advertising campaign in Germany committed the cardinal error - in the UK - of involving Royalty.

'It was an advert for a sandal, suggesting the Queen endorsed them,' Mr Alexander explains.

'A complaint was lodged with the British embassy [in Germany], and the ASA got the advert pulled.'But the cultural divide goes both ways.

Mr Dresden describes a famous Ford advertising case, in which the image was a polaroid of a very long car with slightly menacing-looking people around it.

'In Italy it was pulled, because it had strong Mafia connotations.'Whatever the cultural differences facing the risk assessments of advertising, lawyers agree that changes back home are causing more concern.

Mr Alexander and Mr Dresden both agree that the recent success of Ryanair against British Airways - in which the court defended the budget Irish airline's 'hardball' slogans, comparing its prices to BA's - is symptomatic of the High Court taking a back-seat role in relation to advertising regulation.Stephen Groom left Macfarlanes in 1985 to join Lewis Silkin, where he became a partner in 1986; he left the firm in 1999 to join Osborne Clarke, which - partly as a result of his arrival - has gained a good reputation in the sector.

He acts for Times newspapers and Carlton Screen Advertising in addition to many of the large agencies and marketing outfits.

He says: 'The consensus in the High Court seems to be "the consumer must realise that the advertisers are capable of talking a pack of lies" - that the consumer cannot be unduly influenced.'The courts will not take the ASA regulations into account in deciding whether advertising is unlawful, Mr Dresden says, adding: 'As a matter of law that may be correct.

But the effect is to leave advertisers feeling that the only place to obtain justice, despite the delays and the limited sanctions, is the ASA.' The laissez-faire attitude of the courts has undoubtedly caused the level of complaints to the ASA to increase.

Recently, the ASA's new chairman, Gordon Borrie, has expressed his concern at the ASA being hijacked by advertisers making complaints about their competitors.Mr Groom says the UK might benefit from following the example of Scandinavia, where a special markets court has been formed to deal with both customer and inter-industry marketing complaints.Other new developments - notably the Human Rights Act 1998 - have created opportunities for lawyers seeking to challenge ASA decisions.

Mr Groom explains that in one recent case, acting for a Dr Rath, who manufactures health products, he attempted to overturn an ASA sanction using judicial review, based on his client's right to free speech under the Act.The attempt failed, but Mr Groom explains that the court rejected the argument partly because the British code of advertising is underpinned by specific healthcare regulations.

'Where such specific regulations do not apply to a sector, such arguments based on free speech may succeed in future,' he says.

So, does working for the finest advertisers in the world have any impact on the self-images of these firms? Mr Alexander and Mr Dresden agree that Lewis Silkin is conscious about the design of its literature aimed at clients.

Mr Alexander says: 'We know that you have ten seconds to catch their eye - that's it.' Mr Groom says: 'All good ad lawyers have a bit of the ad creative in them, and when it comes to marketing, one of the things that attracted me about [Osborne Clarke] was its sophisticated operation.'Having said that, I think all clients have a certain expectation of their legal advisers, and when it comes to promoting the ad law practice, the best policy is not to be too clever.

It's a case of "if you can't beat 'em, don't join 'em".'Mr Courtenay-Stamp says: 'We have always been conscious of the importance of image, but we want people to come here for the quality of the work, not the fact that Macfarlanes is written over the door.'We are not the kind of firm that puts big adverts in the papers - we want word of mouth.' But is that not just a sophisticated way of advertising? 'Well, yes, I suppose so,' he acknowledges.