“Also Ran” fund manager fails in libel claim

Jupiter Unit Trust Managers Ltd has failed to convince the High Court that an advertisement by rival Johnson Fry Asset Managers PLC, which described Jupiter as an “also ran”, was defamatory.

Johnson Fry’s advertisement, under the headline “Why get your ISA from an also-ran?”, contained an illustration showing a horse race with individual horses named after different fund managers. Johnson Fry was in the lead with other managers trailing behind, Jupiter being in third place.

Jupiter sued for libel and Mr Justice Morland was called upon last week to decide whether the advertisement was defamatory.

Jupiter claimed that the advertisement’s natural and ordinary meaning was that it “was unable or unwilling to work as hard or as effectively in the management of its funds as the Defendant, and therefore consistently achieved a substantially lower return on them than the Defendant, so that investors would be foolish to entrust their money with it.”

In line with other comparative advertising decisions where the courts have been reluctant to accept that consumers take advertisements literally, the judge had little time for this claim: “My conclusion is that to derive any meaning defamatory of Jupiter from the advertisement would be far fetched and an over-stretched meaning of its language.”

Jupiter also sued for malicious falsehood, claiming amongst other things that the advertisement falsely implied that Jupiter was placed third behind Johnson Fry in the group weighted performance figures for small unit trust groups for the year to 31 December 1998.

The judge struck out this claim as well, finding that Johnson Fry had not overstepped the permissible limit of denigration or disparagement of its rival’s product. In the judge’s view “most reasonable readers take such claims with a pinch of salt.”

The courts tend to treat comparative advertising disputes as petty squabbles between commercial people who should know better than to waste the court’s time. The judge criticised Jupiter and Johnson Fry for not making more effort to resolve their differences. The companies’ chief executives had met for dinner once and the judge regretted that they had not either had dinner again, agreed on a mediator or resolved the matter through the Advertising Standards Authority.

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