CASL UPDATE - Compensation Nixed

Jason Unrau,
Cabinet yesterday shelved a regulation allowing consumers to file $200 compensation claims over computer spam. The law was to come into force July 1. Retailers and marketers anticipated a flood of nuisance lawsuits.

“We’re pleased and relieved the government heard what small businesses were saying,” said Monique Moreau, director of national affairs for the Canadian Federation of Independent Business. “This law would have had a limiting effect on innovation and customer relations for businesses across Canada.”

Anti-spam legislation enacted in 2014 included a clause on “right of action” allowing consumers to take marketers to court. Consumers alleging breach of the Personal Information Protection & Electronic Documents Act could sue for compensation of “actual loss or damage” to a maximum $200 per contravention. More serious breaches such as malicious installation of software permitted compensation claims up to $1 million.

Industry Minister Navdeep Bains said the regulation was suspended. “We have listened to the concerns of stakeholders and are committed to striking the right balance,” Bains said in a statement; “Canadian businesses, charities and non-profit groups should not have to bear the burden of unnecessary red tape and costs to comply with the legislation.”

“The private right of action was an egregious piece of legislation,” said the Federation’s Moreau. “We’re relieved the government has decided to suspend it indefinitely.”

“The legislation in its entirety has a long way to go before it is free of red tape,” said Moreau. “The vast majority of us have had to deal a lot less with spam on a regular basis as we did when this legislation came into effect in 2014.”

Industry Canada in a memo earlier obtained through Access To Information noted that, while other countries such as the U.K. and New Zealand have similar anti-spam laws, Canadian marketers anticipated a “deluge of litigation” once the right of action regulation came into force.

“The provision would cost Canadians heavily in lost productivity and mischievous litigation,” said Perrin Beatty, CEO of the Canadian Chamber of Commerce. Beatty said the private right of action “would have exposed Canadian business to potentially unjust and costly” claims.

The anti-spam Bill C-28 An Act To Promote The Efficiency & Adaptability Of The Canadian Economy restricts unsolicited email, with exemptions for messages to current customers; warranty and bank notices; and responses to emailed questions.

Cabinet yesterday said it will proceed this year with a required statutory review of the bill. “We are very supportive of the decision to ask Parliament to undertake a full review of the law,” said the Chamber’s Beatty.