‘Predatory and exploitative’ Lorna Jane fined $5 million by Federal Court for false COVID-19 prevention claims

Leading active wear brand Lorna Jane has been fined $5 million by the Federal Court for claiming its clothing "eliminated" and stopped the spread of COVID-19.

Launched in July last year at the height of the first wave of Coronavirus lockdowns, Lorna Jane claimed that its clothing used "a groundbreaking technology" called LJ Shield to prevent the "transferal of all pathogens".

However, in a ruling, Federal Court Justice Darryl Rangiah said the company's claim sought to exploit fear and concern and was "exploitative, predatory and potentially dangerous".

In a decision handed down in Brisbane today, Justice Rangiah said the substantial penalty reflected the seriousness of the conduct, noting “the advertising campaign was conducted in July 2020, at a time of considerable uncertainty, fear and concern amongst the public about the consequences and spread of COVID-19.

"Lorna Jane sought to exploit that fear and concern of the public through the use of misleading, deceptive and untrue representations about the properties of LJ Shield activewear.

"Lorna Jane sought to profit from the fear with concerns of the public in a way that involves unlawful conduct in contravention of the relevant provisions of the Australian Consumer Law.

Justice Rangiah said the Court must impose a substantial penalty to reflect the conduct's seriousness and demonstrate "exploitative conduct of this kind will not pay".

Advertisements on the brand's website, stores and on Instagram made the claim: "Cure for the Spread of COVID-19? Lorna Jane Thinks So".

The Australian Competition and Consumer Commission (ACCC) launched court action against the company, accusing it of making false and misleading claims.

ACCC Commissioner Sarah Court had previously said the matter was "particularly concerning", with Lorna Jane giving the impression the COVID-19 claims were based on scientific or technological evidence.”

Court added “we are particularly concerned about this because consumers often trust well-known brands and assume that their marketing claims are backed up by solid evidence.”

The company maintained that it had been misled by its own supplier, with Lorna Jane Chief Executive, Bill Clarkson advising "a trusted supplier sold us a product that did not perform as promised.

"They led us to believe the technology behind LJ Shield was being sold elsewhere in Australia, the USA, China, and Taiwan and that it was both anti-bacterial and anti-viral. We believed we were passing on a benefit to our customers."

The company also admitted that its founder and Director, Lorna Jane Clarkson, who is also its Chief Creative Officer, authorised and approved the LJ Shield activewear promotional material and personally made some false statements in a press release and an Instagram video.

Justice Rangiah said he had taken into account that "the conduct emanated from a high managerial level within the company" and "was directed by Ms Clarkson".

Lorna Jane, which has stores across Australia, New Zealand, the US and Singapore, has been ordered to publish corrective notices. It is also not allowed to make any anti-virus claims related to its activewear clothing for three years unless it has reasonable basis to do so.

In July last year, Lorna Jane was fined almost $40,000 by the Therapeutic Goods Administration for failing to seek correct approval for the ads.

Lorna Jane said it accepted the Court's ruling while action against Lorna Jane Clarkson for being "knowingly concerned" in the conduct did not proceed.

Images: Lorna Jane has stores across Australia, New Zealand, the US and Singapore selling its activewear (top) and a Lorna Jane infographic on the product (below).