ASA wins battle against Telimatrix

The vehicle tracking company Telimatrix (Pty) Limited ("Matrix") filed a lawsuit against the Advertising Standards Authority of South Africa (ASA) for damages suffered as a result of the ASA's alleged wrongful conduct in the dispute between Matrix and its competitor, Netstar (Pty) Limited.
 
The advertisement in dispute included the words, "When you're hijacked your insurance will get you another car. Can they get you another family? What value would you put on this hijacked car? Now, what if we told you your baby was in the back seat?"
 
The ASA Directorate ruled that Matrix's advertising contravened the Code of Advertising Practice as it unjustifiably played on fear, and instructed Matrix to withdraw its advertising. Matrix appealed to the Advertising Industry Tribunal, which reversed the Directorate's decision on the basis that Netstar's complaint did not relate to the issue of fear.
 
Matrix sued the ASA on the basis that the ASA Directorate's decision was made negligently, outside the ambit of the terms of the complaint and/or arbitrarily. Matrix further claimed that the ASA was, or ought to have been, aware that an adverse ruling would result in damages to Matrix.
 
In response, the ASA argued that Matrix's claim does not have a basis in law, as a body such as the ASA, in reaching a decision, is not liable for damages if that decision is shown to have been negligent or irregular.
 
In finding in favour of the ASA, the High Court held:
-- The ASA's decision structure consists of different levels of appeal, giving an aggrieved party a way in which to obtain redress. This indicates that a claim for damages would not lie in respect of a decision made by the Directorate unless taken in bad faith. 
-- The ASA's ability to function urgently and fairly would be hampered by a fear of liability if advertisers could claim damages in these circumstances. The aims and interests of the ASA in regulating advertising in the public interest would not be achieved and served in the event of liability as a result of a negligently erroneous decision.  It is not just and reasonable that a civil claim for damages should be compensated in the circumstances.
 
Matrix's claim against the ASA was thus dismissed, and Matrix was ordered to pay the ASA's legal costs.

"The ASA will vigorously oppose any allegations of wrongful conduct which are not based on solid grounds. This decision is important not only for the ASA, but for all Self-Regulatory Bodies" commented Deline Beukes, The ASA Executive Director.