Ottawa has announced that its controversial plans to allow private individuals to sue companies that violate Canada’s anti-spam legislation (CASL) have been shelved — at least for now.
In a brief announcement on Wednesday, Navdeep Bains, federal minister of Innovation, Science and Economic Development, stated that the government was responding to the concerns of “stakeholders” and it will be asking a parliamentary committee to review this aspect of the legislation even though it remains committed to shielding consumers from spam.
The move, which was not expected as recently as a few months ago, comes after years of strong warnings from a host of sectors, ranging from the legal community, to marketers, to small and large businesses. Concerns have ranged from opportunistic class-action lawsuits with potentially outsized consequences for businesses, to undue restrictions on conventional commercial marketing activities. Penalties under the legislation now range from a maximum of $1 million for individuals to $10 million for companies. Class actions under the private right of action may have increased those amounts.
Timothy Banks, a lawyer with Dentons Canada LLP in Toronto, whose specialties include privacy and data governance issues, has noted in the past that financial advisors, among other groups, would need to prepare carefully for the new law, which had been due to come into force July 1, three years to the day that CASL came into effect.
Banks said in an email to Investment Executive that the change is “welcome news” and that other changes may also be in the works.
“Not only is the private right of action delayed, but the government has signaled that it is open to rethinking the legislation to strike a better balance [between consumer protection and flexibility for businesses],” said Banks in the email. “It is clear that the previous government [of former prime minister Stephen Harper] vastly underestimated the costs of compliance and the impact on legitimate commercial messages. The CRTC has a very difficult task to perform in enforcing this legislation. But the unrealistic recordkeeping and compliance program expectations of the CRTC have not helped in ensuring that this legislation is enforced in a balanced way. A rethink is required. Hopefully, this is the beginning of that process. However, we cannot count on any changes. All organizations, financial advisors included, must continue to comply with the law, which is in force and will be enforced by the CRTC.”
Although advisors and their firms can take some comfort from these developments, it’s also key to keep in mind that compliance with CASL is an ongoing challenge. The CRTC has received thousands of complaints since the law was enacted and has imposed stiff penalties in some cases.
One persistent issue has been that the law can be difficult to interpret. For example, implied consent to an electronic commercial message shields the sender from being found in violation of the act. However, it may be far from clear when implied consent has been given. And, in many cases, consumers may not even be aware that they have given implied consent – such as by posting their email in a conspicuous way – and may complain about what they view as spam, triggering an investigation.
A recent decision from the CRTC may be helpful in reviewing the kinds of conduct that will continue to attract regulators’ attention. They include indifference to enquiries from regulators about spam-related complaints and efforts to avoid consequences by refusing to respond to regulator investigations.
In addition, a recent survey from law firm Fasken Martineau DuMoulin LLP includes specifics on the types of electronic messages that businesses, including many financial services firms, are still sending out routinely that may be in violation of the law.
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