Inside the client vs agency test case: Lessons learned from the Advangen litigation
Ikon Communications’ recent court win against its former client Advangen provides compelling reasons for why it is time to hit ‘reset’ on the agency-advertiser relationship, write Stephen von Muenster, partner and Chris Paver, associate from DVM Law, who represented Ikon in the case.
Who should be responsible when an ad campaign doesn’t meet the advertiser’s expectations? Is it the agency which developed, planned and executed the campaign and bought the media? Or the advertiser who requested and signed off on it? Or does responsibility lie somewhere in between?
Ikon Communications’ recent Supreme Court of NSW win against a former client has potentially far-reaching consequences for the broader communications industry. For the first time, agencies can now look to guidance from the courts to help determine the professional standard of care they owe to their clients.
The Ikon case related to a campaign Ikon had developed for its advertiser Advangen International, which owns the Evolis line of hair loss products. Ikon had sued its former client for unpaid invoices totalling nearly $1 million plus interest. In response, Advangen cross-claimed against Ikon, alleging that the agency had caused loss and damage by breaching the contract between the parties and had made misleading representations in breach of the Australian Consumer Law. After a two-year legal battle in the Supreme Court of NSW, the advertiser’s allegations were ultimately rejected and on 22 November 2018 the court awarded Ikon about $1.3 million plus costs.
Looks like Ikon did all the right things.
Great win and looks more-so that advertisers should take a good hard look at themselves; not necessarily the agencies.
Sincerely,
MR
An outstanding outcome for Ikon, and the right outcome.
Congratulations Stephen and Chris, that’s a huge accolade. Well argued, and of particular note, the comment that “The Court found that whether a particular advertisement is likely to work or not was a matter of subjective opinion.”
Thank goodness that common sense prevailed.