A last-minute reprieve for email marketers: government suspends private right of action for breach of anti-spam laws

Since 2014, we have followed the development of Canada's anti-spam legislation (the Act or CASL)¹, often described as the most stringent of its kind in the world. On July 1, 2017, the final set of CASL articles was to come into force, most notably providing for a private right of action (the PRA) to remedy contraventions of the Act.²

On June 7, 2017, citing mounting pressure from businesses and charities, the Government of Canada suspended the implementation of the PRA pending a further parliamentary review.

The private right of action

At present, contraventions of CASL are only actionable by the relevant regulators. On July 1, however, the new PRA remedy would have allowed any individual (or class of individuals) to bring a claim alleging contraventions relating to sending commercial electronic messages and installing computer programs under CASL, as well as contraventions of the Personal Information Protection and Electronic Documents Act dealing with consent or authorization for collecting information and of Section 74.011 of the Competition Act (deceptive marketing practices for electronic messages).

Significant potential civil exposure

The PRA provided for two heads of damages for contravention of any of the above provisions, either or both of which may be claimed:

• damages for actual loss or;

• up to $200 per contravention, up to a maximum of $1 million per day regardless of whether any loss has been suffered.

In addition to the corporate entity or individual directly responsible for the contravention, the PRA would have allowed actions to be brought against officers, directors and agents if they were somehow complicit – even where the corporate entity itself is not named.

Given that few individuals would have suffered actual damages, the expectation was that breaches would give rise to class actions claiming the maximum $200 statutory penalty for each individual consumer who received a non-compliant email. The potential exposure to businesses under the PRA was very significant.

A welcome reprieve … for now

Many commentators and businesses had expressed concern about the PRA, arguing the lack of any need to prove actual damages could result in liability entirely disproportionate to the harm suffered (if any). The government has announced it supports a “balanced approach” in the review and reconsideration of the PRA by Parliament. It remains to be seen whether that review will result in a solution that assuages the current concerns of industry.  

Footnotes

¹ An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act, S.C. 2010, c. 23 (a.k.a. Canada’s Anti-Spam Legislation or CASL).

² CASL, s. 47-52.