In Webster v Liddington (2014), the Court of Appeal unanimously upheld a decision of the lower court that a group of cosmetic clinicians were liable for misrepresentations made in a cosmetic product manufacturer's marketing material which they had provided to patients. The Court held that even though the clinicians did not write the material themselves, they had adopted the material as their own, thereby assuming liability for it. Webster serves as a reminder that suppliers who share a manufacturer's promotional materials with consumers should take steps not to assume a duty of care in relation to it, including making an appropriate disclaimer.

Background

Isolagen Europe Ltd ("IEL") was a company which devised and marketed a cosmetic procedure involving the injection of a substance known as "Isolagen" into patients' faces to rejuvenate skin and restore a youthful appearance. The product was promoted as a natural alternative to other existing cosmetic procedures, since it purported to use only the patient's own cells taken from a small skin sample behind the ear. The skin sample was cultivated in a mixture known as "Foetal Calf Serum" ("FCS"), and washed clean to produce the injectate. IEL produced brochures to market the Isolagen procedure, which they provided to clinicians who then distributed the brochures to their patients. Some clinics also produced their own brochures to promote the procedure, based on information provided by IEL.

A number of patients who underwent the procedure (the "Claimants") later discovered that the injectate may have contained traces of FCS, which can cause an allergic reaction. The Claimants alleged that the brochures had misrepresented the procedure by stating that the injectate consisted only of the patients' own cells.

IEL ceased trading in November 2006 and subsequently went into administration. A group of patients who had received Isolagen treatment and suffered as a result decided to pursue proceedings against their clinicians (the "Defendants") in the Manchester County Court.  At first instance, the Judge decided in favour of the Claimants and held that the Defendants were responsible for the content of the brochures, and that the brochures had contained misrepresentations.

The Defendants appealed to the Court of Appeal on two key grounds:

  • The Judge had erred in holding that the Defendants were responsible for the accuracy of the content of the brochures; and
  • The identified sentences in the brochures were not misrepresentations because they were substantially or materially accurate.

Decision

In his leading Judgment in the Court of Appeal, Lord Justice Jackson dismissed the Defendants' appeal.

He held that there were four non-exhaustive scenarios which might arise when a person (X) passes information produced by a third party (Y) on to a consumer (Z):

  1. X may warrant to Z that the information is correct, thereby assuming contractual liability to Z for the accuracy of the information;
  2. X may adopt the information as his own, thereby taking on such responsibility as he would have if he, himself, had produced the information;
  3. X may represent that he believes, on reasonable grounds, that the information supplied by Y is correct; and
  4. X may simply pass on the information to Z as material coming from Y for which X has no liability for the accuracy of the information.

The Court held that the present case (both in cases where the Defendants had distributed IEL brochures and in cases where the Defendants produced their own brochures) fell into the second scenario. In reaching this decision, Lord Justice Jackson also referred to the case of IFE Fund SA v Goldman Sachs International (2007) which formulated the test for the extent to which a representor is liable for information produced by a third party by asking what a reasonable consumer would understand from the representor's words or infer from the representor's conduct in the given circumstances. The Court held that the reasonable consumer would conclude that the clinicians were adopting the content of the brochures as their own, and as such had assumed responsibility for any misrepresentations made in the brochures.

The Court noted that it was of particular significance that there was a stark imbalance of knowledge and expertise between the qualified Defendants and the consumer Claimants. Other important factors cited by the Court were that the Defendants were offering to sell both a product and a service to the Claimants, that the relationship between the parties was that of clinician and patient, that the Isolagen treatment was purely elective in nature, and that the Defendants did not provide any disclaimer about the information contained in the brochures.

In relation to the second ground for appeal, Lord Jackson held that the judge at first instance was correct in finding that even small traces of FCS in the injectate were material, and therefore the representations regarding the treatment in the brochures were not substantially accurate.

Comment

Although the facts of Webster relate to the field of cosmetic practice, the Court's decision serves as a useful reminder to suppliers in general as to the risks if they pass on information produced by a third party. It is important to ensure that an appropriate disclaimer is provided to end-consumers when sharing manufacturers' promotional materials.  Failure to provide such a disclaimer may result in the supplier assuming liability to consumers for misrepresentations made in the manufacturer's promotional materials. This is particularly important where there is an imbalance of knowledge and expertise between the supplier and the consumer. Suppliers of third-party goods and services should review their terms and conditions to ensure that the extent of their liability for third-party marketing information is as clear as possible to consumers.