Should corrective advertising be ordered?
82 The applicant seeks orders that MBF screen at its own expense advertisements correcting the misrepresentations and further that it be ordered to write to all persons who purchased MBF health insurance products between 28 May 2000 and 15 July 2000 and between 13 August 2000 and 1 October 2000 (the latter period being the period in which the print advertising and billboard advertising appeared) advising them that consumers may have been misled and that MBF will, for persons who were misled waive all waiting periods in respect of pregnancy related services. The applicant also seeks an order that the John Bevins agency circulate to all members of the Advertising Federation of Australia a notice advising them of the Court's finding of contravention and providing details of the convention and referring members to information available from the ACCC.
83 The applicant relies upon s 12GE of the Act which relevantly provides:
"if, on the application of the Minister or the Commission, the Court is satisfied that a person has engaged in conduct constituting a contravention of a provision of Subdivision D (sections 12DA to 12DN), the Court may make either or both of the following orders:
(a) an order requiring that person or a person involved in the contravention to disclose to the public, to a particular person or to persons included in a particular class of persons, in such manner as is specified in the order, such information, or information of such a kind, as is so specified, being information that is in the possession of the person whom the order is directed or to which that person has access;
(b) an order requiring that person or a person involved in the contravention to publish, at his or her own expense, in a manner and at times specified in the order, advertisements the terms of which are specified in, or are to be determined in accordance with, the order."
84 It may be noted that this section was repealed in 2001 and took substantially the same form as s 80 of the Trade Practices Act.
85 I do not think that the present is an appropriate case to order MBF to make good the representation by sending letters to all members of the public who joined in the relevant periods. Such an order was made by Spender J in Australian Competition and Consumer Commission v World Netsafe Pty Ltd [2000] FCA 1827, but the circumstances of that case were different and the order was made in a case where the Respondent had entered no appearance or defence.
86 While there will have been persons, like the Sorrensens and the O'Briens, who were misled into purchasing MBF products by the present advertisements, it is likely that most consumers were not, if only because they will not have relied upon the advertisements, but rather upon other information and literature given to them by MBF. If corrective advertisements are placed with television stations the nature of the misleading conduct will be drawn, anyway, to the attention of the public and if they were misled they will be able to take such advice as they may receive in the circumstances of their case.
87 As French J pointed out in ACCC v Real Estate Institute of Western Australia Inc (1999) ATPR 41-719, a case decided by reference to ss 80 and 80A of the Trade Practices Act, injunctive relief should not be granted as a penalty or as punishment. The purpose of such advertising is to bring the outcome of the proceedings to the attention of the public as consumers, although not as such merely to announce a win for the ACCC, but rather as an aid in the enforcement of the primary orders and to prevent repetition of the conduct in question. His Honour expressed a doubt as to whether an appropriate purpose of such an order would be solely the education of the public.
88 There is no doubt that the Court has a wide discretion, limited only by the requirement that the relief be appropriate in both form and in its terms. Lee J in ACCC v Target (supra) said at [19]:
"The purpose sought to be achieved by corrective advertising is to raise public awareness - both for consumers and competitors - as to the type of conduct that may contravene the Act, and as to the outcome of the particular litigation [reference omitted]. Corrective advertising may be a particularly appropriate remedy where the conduct that breached s 52 consisted of media advertisements. Matters to be considered in the present case were that the advertisements were broadcast nationally, and repetitively, to a large number of consumers. The nature and prominence of the advertisements presents the inference that a number of people may have been misled or deceived, such people being unaware the conduct was misleading or deceptive and being unaware of their right to a remedy [references omitted]."
89 The question then is whether it is appropriate in the interest of consumer protection, although not punishment, to order corrective advertising having regard to the scope of people likely to have been affected by the misleading or deceptive representations.
90 It was submitted on behalf of MBF that the conduct had occurred now a considerable time ago and was "stale". The initial effect of the advertising had, it was said, evaporated. The time for it had passed. Indeed there was some risk, it was suggested, that the advertising would rather increase MBF's business than protect consumers.
91 On the whole I think there is utility in requiring MBF to publish both on television and in newspapers circulating in the area where the television advertising was screened an advertisement which will not merely remind the public that MBF had engaged in conduct which was misleading but also alert consumers to the importance of questioning advertisements and the insurance industry of the importance that their advertising not mislead or deceive consumers. Such advertising will, also, make consumers aware, if they themselves were induced to purchase insurance on reliance of the advertisements, that they might have some remedy. Further, the general complexity of the health insurance products and particularly waiting periods means that even if consumers had forgotten the actual advertisement, a corrective advertisement will assist them to understand the importance of waiting periods in the future and increase the awareness of consumers accordingly.
92 The precise terms of the advertising were not the subject of any detailed submissions. For this reason I would not make the order at this stage but rather hear such submissions as the parties may care to make about the form of the advertising.
93 The case for an order directed at the John Bevins agency directing it to circulate a notice to all members of the Advertising Federation of Australia is different. Such an order would not, as such, assist in informing the public. Rather it would seem directed at punishing the agency by reporting it to its peers and announcing a win for the applicants. In refusing to make such an order I take into account that the agency no longer acts for MBF, that something over two years have passed and, more significantly, that members of the Federation will in any event learn of the orders made against MBF from the newspaper advertising and, it may be presumed, from press releases of the ACCC.
94 My attention was drawn to a speech given by Professor Fels, the Chairman of the Commission to members of the Advertising Federation of Australia in which Professor Fels made specific reference to the present case, noting that the Commission was seeking orders against the John Bevins Agency. There was also an article, apparently written by Professor Fels in the February 21-27 2002 edition of the Business Review Weekly which made reference to the fact that the proceedings against the Agency were on the basis that it was knowingly involved in false and misleading and deceptive advertising of health insurance. It might be said that while the Commission is entitled to tell the public that proceedings have been brought and the general nature of those proceedings, there is a danger that wide dissemination of the fact before a hearing might in a particular case injure, perhaps irreparably, the person against whom the proceedings are brought.
95 Be that as it may, I think that it can be accepted that the speech to the Federation coupled with news of the outcome of the proceedings will clearly ensure that the members of the Federation will be aware of the result of the present proceedings without yet further publicity being given to the matter in a case where the breach was not deliberate and where the Agency relied upon both the legal advisors of MBF and the fact that the advertisement had been the subject of vetting by CAD, both matters which had the present been a prosecution would have constituted a defence under s 12G(1)(c)(ii) of the Act.