Following an investigation, the ASA held that an internet advert of UK2 Telecom Limited’s (the “C”) (on the Google banner) breached the CAP Code (“the Adjudication”). That decision arose out of the ASA’s own challenge to the advert. The ASA rejected another complaint from a competitor.
C appealed to D, Sir Hayden Phillips, the Independent Reviewer of ASA Adjudications, arguing that the Adjudication was substantially flawed. D rejected C’s challenge (“the First Decision”).
C sent a pre-action protocol letter before claim to D and the ASA setting out why the Adjudication and First Decision were irrational. D’s initial response indicated that he conceded C’s claim in full and would be asking the ASA to reconsider the whole matter. D said he would respond substantively after some further work. Consequently C held off issuing proceedings.
Three weeks later, D’s first substantive response to the letter before claim (“the Second Decision”) made clear that in fact D did not accept key aspects of C’s claim regarding the irrationality of the First Decision and Adjudication. It was evident that D was about to progress the matter in a way which C considered unfair.
C wrote to D setting out its concerns, stating that at no stage had D made reference to a recent, germane ASA rule change – that the ASA should make its own challenges to adverts “… only in exceptional circumstances…”. C reserved its right to issue proceedings in the absence of a satisfactory response within seven days.
On the eighth day C issued JR proceedings against D, naming the ASA as an Interested Party. D’s response crossed with filing of the claim form, but rejected most of C’s concerns. D stated he would be unable to progress the matter further for a number of weeks. Accordingly, C served proceedings on D, seeking the Administrative Court’s intervention.
D filed an Acknowledgment of Service and Summary Grounds of Resistance, but a month later he informed C that he now intended to recommend that the Adjudication be expunged and that there should be no further investigation of C’s advertisement. The Adjudication was later expunged by the ASA, in March 2012.
In effect the claim was conceded, and C applied for its costs from the preparation of the letter before claim. The issue was dealt with on written submissions. D argued that the proceedings had been unnecessary in respect of the First Decision (as that decision had been withdrawn); that the challenge to the Second Decision was premature; that C had not followed the Pre Action Protocol in certain respects; and that issuing proceedings had been an exercise in recovering sunken costs, which was not allowed.