As we continue to blog from the NAD/CARU Annual Advertising Law Conference, there was big news about significant changes to the NAD challenge and review process, which will be reflected in changes to their existing procedures. The changes arise from a review of the self-regulatory process and a resulting report done through the ABA Antitrust Section and its Consumer Protection and Alternative Disputes and Litigation Committees. While the report overwhelmingly concluded that the NAD process generally works very well, there were some findings and recommendations for change. A summary of the changes is below, and they are far more than modest tweaks to the process:
- NAD will initiate a scheduling process at the beginning of each competitive challenge case. Eventually there may be Rule changes around scheduling and new procedures around a formal scheduling process.
- NAD’s procedures will now allow private settlements of pending challenges.
- NAD will limit the scope of claims in challenge cases to those set out by the challenger, and the new rules to require challenges filed with NAD to list specifically all expressed and implied claims being challenged.
- NAD will no longer participate in an appeal as a party to the proceeding unless invited by the Panel Chair.
- NARB appeal submissions may not contain new factual evidence not presented to NAD but may contain new arguments based on the final NAD decision or on cases and statutes, whether or not they were previously in the record.
- The NAD/NARB Procedures will now make clear that NARB panels review cases on a de novo
- If a compliance challenge arises out of an NARB decision, the NARB Chair will now serve as the deciding official, not NAD.
- The NARB Chair working with the NAD will clarify the NAD/NARB Procedures to specify a clearer standard for granting a challenger appeal.
- The NAD will amend its Procedure to provide that NAD case filings may not exceed 20 double spaced typewritten pages (excluding exhibits).
- The CBBB, which administers the NAD and NARB program is, subject to ensuring adequate funding, making upgrading of the Online Archives a priority IT project. There was a report at the conference about improvements made already and we can expect more in future.
- The CBBB IT staff has also already significantly upgraded the New York Office telecommunications infrastructure and, subject to funding, is exploring the addition of teleconferencing capability.
I participated as an editor on this paper, and worked with 60 industry and firm lawyers, all of whom are regular participants in the NAD process. Everyone involved with the report was impressed with how carefully NAD and the ASRC Board considered the recommendations and adopted many of the suggestions. We understand that the Board will continue to look at the feasibility of adopting other recommendations, as well as take a careful look at how the new procedures are working. Such a periodic thorough kicking of the tires is critical to the continued success of a robust and meaningful industry self-regulatory program. Kudos to NAD!