False endorsement damages boost for celebrities

In reviewing the case of Irvine v TalkSport Limited the Court of Appeal has addressed the issue of the approach to be used in measuring the damage suffered by celebrities as a result of false endorsement and has decided on a method that generally should favour the celebrities.

The Court affirmed the view of the judge at first instance that an action for passing off could be based on the misrepresentation created by a doctored photograph – in this case a photograph showing the racing driver Eddie Irvine holding a radio with a radio station's name emblazoned on it. However the Court went on to decide that the damages awarded - GBP2,000 - had been assessed on an incorrect basis.

Both sides agreed that the damages should be "a reasonable endorsement fee" but the view of the Court of Appeal was that the court at first instance had been wrong in deciding that this reasonable fee would be the amount that the defendant would have reasonably paid to feature the celebrity in their advertising, taking into account the total cost of the advertising campaign and the target audience. On appeal it was ruled the proper measure was the fee that the defendants would have had to pay had they obtained the endorsement lawfully which on the evidence was GBP25,000.

The judgement is a boost for celebrities who suffer from false endorsements. Had the original assessment method been approved, especially in respect of minor advertising projects there would be little incentive for celebrities to mount actions on the basis of their rights and correspondingly little disincentive for advertisers not to use the images of celebrities without their permission.

In the present case the decision was of added importance for Irvine as he had turned down an offer to settle from the defendant of more than GBP2,000 and as a result faced legal costs of up to GBP300,000. The increase in damages has shifted the burden of paying costs to the defendant.

For further information, please contact David Roberts by telephone on +44 (0) 20 7367 3678 or by e-mail at [email protected], or Yuban Moodley by telephone on +44 (0) 20 7367 3453 or by e-mail at [email protected].