Self-Regulation Meets Self-Mediation

Revisions to the challenge and appeal process recently introduced by the National Advertising Division of the Council of Better Business Bureaus (NAD) are making proceedings before the NAD considerably more efficient for challengers and advertisers.

One of the more notable revisions to the NAD's Policies and Procedures was the addition of Rule 2.2(E), which provides that the NAD will administratively close a case if the challenger and advertiser reach a private settlement. Prior to the introduction of this rule, the NAD's discretion to close a case by consent of the parties was based on the far more amorphous Rule 2.2(B)(1)(f), which allows the NAD to administratively close a case if the allegations at issue are "without sufficient merit to warrant the expenditure of NAD/CARU's resources." Importantly, when the NAD administratively closed a case pursuant to Rule 2.2(B)(1)(f), it typically conducted a review of the settlement reached between the parties to ensure it