With Canada’s Anti-Spam Law (CASL) scheduled to take effect on Canada Day, CMOs will be happy to know that a controversial provision that could have allowed residents to file class-action lawsuits worth millions of dollars for unwanted emails has been suspended.
However, suspension of one provision does not mean suspension of the law, and both the Canadian Marketing Association (CMA) and Canada’s legal community are advising marketers to comply with CASL – and that includes asking email newsletter recipients whether they want to remain on a company’s list.
When CASL was passed in 2014, it included a series of transitional provisions that delayed the law from taking effect until July 1, 2017 – this Saturday – giving companies three years to comply, Adam Kardash, a Toronto-based partner with North American business law firm Osler, Hoskin & Harcourt LLP, tells ITBusiness.ca.
It also included what he says could have been a disastrous provision – the private right of action (PRA), which essentially would have allowed the disgruntled recipient of an unwanted email to file a class-action lawsuit worth statutory damages of $200 “per violation.”
And considering the number of electronic addresses on the average company’s mailing list, it’s not hard to imagine one of those lawsuits reaching their limit – $1 million per date covered, up to a maximum of $10 million.
“You wouldn’t have even needed any proof of harm,” Kardash says. “Under the PRA if you had sent, or even permitted the sending of a message, or installed a computer program in violation of the act, you would have been exposed to a potential lawsuit.”
“It exposed companies to all sorts of potentially serious and frivolous litigation.”
In a June 7 statement, CMA vice president of government and consumer affairs Wally Hill called the PRA “unnecessary,” noting that Canadian consumers are already protected from spam by the three regulators tasked with enforcing CASL. However, the organization also said that CASL compliance should remain a key priority for CMA members when it comes to electronic messaging campaigns.
Though another CASL provision demands that the law be reviewed after three years – which means that on July 1 the government is likely to commence consultations about its future – those consultations could once again include a provision allowing for class action lawsuits, Kardash says.
“In essence, what the government’s suspension does is that in the interim time period no one can be exposed to lawsuits under private right of action,” he says. “But now it’s our job as a community to carefully review the act and suggest changes so that we don’t have any problems with the act.”
Flawed legislation
And there are still plenty of problems with the act, he says.
For example, in its current form the range of messages affected by CASL is much too broad, comprising not only marketing and promotional messages but certain administrative or transactional messages that provide factual information such as account, product recall, or safety information, all of which are required to contain an unsubscribe – that is, opt-out – mechanism.
“This makes no sense and is totally confusing for consumers, as nobody would ever consider administrative messages as spam,” Kardash says. “Yet companies who don’t offer an unsubscribe option for these types of messages would be technically violating the statute and therefore face litigation.”
In general, he says, CASL appears to operate under the assumption that users need protection from marketing departments that, left to their own devices, will deluge them under an avalanche of unwanted and unnecessary email, when in reality spam and malware are costly for businesss, and serve to undermine trust in the digital ecosystem.
As a result – and contrary to the beliefs of many – there appears to be widespread support among Canadian businesses for a statutory tool that would effectively deter, and punish, spammers and other bad actors, Kardash says.