Holding advertising agencies accountable for misleading advertisements: Principal or accessorial liability under the Trade Practices Act 1974 (Cth)?

This article examines the decisions of the Full Federal Court in Saatchi [Cassidy v Saatchi and Saatchi Australia Pty Ltd] and Bevins [Medical Benefits Fund of Australia Ltd v Cassidy; John Bevins Pty Ltd v Cassidy], and the important principles they established governing the liability of advertising agencies for misleading or deceptive advertisements. The analysis distinguishes between liability incurred as a principal and liability incurred as an accessory. The article then outlines the ‘proportionate liability’ reforms of the TPA and their impact on the arguments previously advanced, and concludes by confirming that, based on the current law, only in limited circumstances will advertising agencies be likely to face principal or accessorial liability for misleading advertising. Although contrary to the expectations of the ACCC, this result realistically positions the potential ‘gatekeeper’ capabilities of advertising agencies within the existing parameters of the consumer protection regime of the TPA.