Government Suspends Law That Would Let Canadians Sue for Spam

private right of action

CASL would have allowed Canadians a private right of action against spammers.

On June 7, 2017, the Canadian government suspended the portion of Canada’s Anti-Spam Legislation that would have allowed Canadians to sue companies who send electronic spam messages without permission. The provision was set to take effect on July 1, 2017.

What is CASL?

Most of the provisions in Canada’s Anti-Spam Legislation (CASL) came into force back on July 1, 2014. The law’s official title is, 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.

CASL regulates a range of malicious electronic activity, including malware and phishing. The ‘spam’ section sets rules for how and when people and businesses can send commercial electronic messages, like marketing emails, to recipients in Canada or Canadians abroad.

Rules for Electronic Messages Under CASL

In short, you can only send a commercial electronic message to someone if:

  1. You have the recipient’s consent to send them commercial electronic messages;
  2. The message identifies you and contains up-to-date contact information; and
  3. You give the recipient an easy way to ‘unsubscribe’ from the commercial electronic messages.

There are plenty of rules and requirements within those three points, such as what constitutes consent and what exactly the message must contain. But that’s the basic idea of the law. If you want to send someone a newsletter, a coupon, an advertisement, or another commercial message via the Internet or SMS, you need their permission.

Any message that falls short of those requirements is spam.

Penalties for Violating CASL

People and companies who break the law can face substantial fines form the Canadian Radio-Television and Telecommunications Commission (CRTC). The max fine for individuals is $1 million per violation, while corporations can pay up to $10 million. Officers, directors, and agents who authorize or participate in a violation may be held personally responsible.

If that’s not scary enough, CASL was also set to allow individual Canadians to sue spammers in civil court. That’s the part of the law the government suspended at the last minute on June 7th.

But what would have been so bad about that? No one likes a spammer. Wouldn’t it be sweet to enact some civil revenge on those who pollute our inboxes with nonsense?

The problem is statutory damages.

Problems with the Private Right of Action Under CASL

When you sue someone in court, you normally have to prove that the amount you’re suing for (the ‘damages’, in legal terms) accurately reflects the loss you suffered as a result of the person’s actions. If your neighbor backs over your $500 BBQ, you won’t be successful suing them for $1,000. You might not even succeed in getting $500, unless you can prove it’s worth that much.

That all changes when it comes to statutory damages. Statutory damages are minimum damages set out in the law that count on top of your actual damages. So you could potentially get the value of your claim plus the statutory amount.

CASL set statutory damages for spam messages at $200 per violation (meaning per message) to a maximum of $1 million per day. This meant that Canadians with unwanted spam messages in their inbox could potentially have been sitting on spam worth hundreds or thousands or even millions of dollars. Many commentators predicted there would be massive class action lawsuits on behalf of spam recipients once the private right to action came into effect.

This is excessive, to say the least.

Spam is annoying, unwelcome, and poor practice for marketers. But is it worth suing over? In most cases, no. It is a far better use of our tax dollars to pursue violators with fines than it is to litigate in our already backlogged court system.

The government made the right move in this case. If the private right of action is to return, it should be without the statutory penalty.

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