Relief as Private Right of Action Suspended Under Canada's Anti-Spam Law (CASL)

by Bennett Jones LLP
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By way of an Order in Council dated June 2, 2017, the government of Canada has indefinitely delayed the coming into force of the private right of action under Canada's Anti-Spam Law (CASL).

With respect to this amendment, the Honourable Navdeep Bains, the federal Minister of Innovation, Science and Economic Development, stated: 

“Canadians deserve to be protected from spam and other electronic threats so that they can have confidence in digital technology. At the same time, businesses, charities and other non-profit groups should have reasonable ways to communicate electronically with Canadians. We have listened to the concerns of stakeholders and are committed to striking the right balance.” 

By way of background, the private right of action was intended to allow lawsuits to be initiated against individuals and businesses with respect to alleged violations of CASL. It provided for recovery of statutory damages of up to $200 for each violation, not exceeding $1,000,000 for each day on which a violation occurred, in addition to any actual provable damages incurred as a result of a violation. It was widely anticipated that the statutory damages claim would encourage plaintiffs to join together in class action suits to pursue violations under CASL. 

CASL is a highly prescriptive, unintuitive and contradictory law that many organizations have struggled to understand. The enforcement action taken to date by the Canadian Radio-television and Telecommunications Commission (CRTC) have largely been against legitimate companies that have struggled with technical compliance with some of the highly prescriptive requirements under the law and not the traditional 'spammers' that were widely hoped would be the target of the law. Given the complexity and ambiguity of CASL, many organizations, from large and small businesses, non-profits, educational institutions and charities, will likely be relieved to hear that the private right of action will not be coming into force on July 1, 2017. The widespread concern was that the private right of action, as drafted, had a considerable potential to be abused by CASL "trolls" seeking to extract payments from legitimate businesses in relation to technical violations.

While the implementation of the private right of action has now been suspended, the transitional implied consent provisions are unaffected by the above noted Order in Council, and as such will continue to expire as planned on July 1, 2017. As such, businesses and non-profit entities should ensure that they have undertaken appropriate compliance steps in relation to legacy implied consents prior to that date.

The suspension of the private right of action does not mean that it may not be revived.  However, for the time being, the government of Canada has heard the concerns of legitimate businesses.

As well, the CRTC's regulatory oversight is expected to continue undiminished by the above noted Order in Council and may perhaps expand in the absence of the private right of action. All organizations using commercial electronic communications are reminded of the importance of ongoing compliance with CASL and that due diligence remains a defense to prosecution under the law.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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