A law likely to keep lawyers up at night
Anti-spam legislation sparks fears over pending flood of class-action lawsuits
Corporate lawyers are getting ready for a wave of class-action litigation connected with Canada’s anti-spam legislation.
On July 1, a “private right of action” comes into force, opening the door for plaintiff-side classaction lawyers to sue companies for alleged breaches of the law. This changes the game, because up till now companies in breach of the law have only had to answer to government regulators.
The pending lawsuits were a hot topic at a Toronto conference this week by the Canadian Corporate Counsel Association, an organization of in-house lawyers. In-house lawyers ensure their companies comply with laws and regulations, and CASL has already been keeping them quite busy since Parliament passed the law in 2010.
But there’s a fresh sense of urgency in the air. Corporate lawyers are gearing up for potential class-action lawsuits that allege their firms failed to secure prior consents before sending emails or installing software updates.
Peter Clausi, a lawyer with a computer science background who is general counsel with GTA Resources and Mining Inc., described plaintiff-side class-action lawyers as “counting their sleeps” until July 1.
“I can pretty much guarantee you that there’s no one in the room who complies with CASL today. It is a horrible, pervasive, invasive piece of legislation that ought to keep you awake at night,” Clausi told a panel discussion on CASL.
The law regulates every commercial electronic message sent by a company. That part of the law is self-apparent. But the law also regulates automatic software updates and data transfers that might be built into applications installed on devices, such as mobile phones.
“I think that the class action litigation lawyers are going to feast off the software updates,” Clausi said.
You don’t have to be an in-house lawyer to be familiar with CASL. Think back to a few years ago when, out of the blue, it seemed like every company in the country suddenly sought your permission to send you emails. That was because as of July 1, 2014, sections of the law came into force governing “commercial electronic messages” — the legal term for emails, texts, voice mails and other electronic business messages. In 2015, another section of the law kicked in that aims to block malware and spyware by making it illegal for firms to install programs on your computer without your consent.
Until now, government regulators, such as the Canadian Radiotelevision and Telecommunications Commission, have had the power to pursue companies for alleged breaches of the law.
In June 2015, Porter Airlines Inc. agreed to pay the federal government $150,000 after an investigation showed that it had sent out messages without proof of prior consent. The messages also had inadequate unsubscribe mechanisms. In November 2015, Rogers Media Inc. agreed to pay $200,000 because it had sent out emails that had problems with the unsubscribe feature. And last August, Kellogg Canada Inc. paid $60,000 for sending out messages without consent.
Heather Innes, who was previously chief privacy officer with General Motors of Canada Ltd., said the regulatory actions have been harsher than most corporate counsel had expected. But they also offer a preview as to how easy it can be for a company to violate the law. “Even the most sophisticated organization can make mistakes,” Innes told the panel. The regulators mean business, she said. “They are going to fine, and they are going to fine even if people have simply made mistakes.”
Bill Abbott, assistant general counsel and privacy ombudsman with Bell Canada, said that regulatory enforcement has focused on clear violations of the law. He expects class-action lawyers to cast a wider net with their claims.
“Private right of action brings an entirely different environment with profit-driven plaintiffs who aren’t restricted by policy,” Abbott said. “Unlike the CRTC, which appears to be avoiding the ambiguous areas, that’s what they play on. That’s where they bring claims.”
(Canada’s anti-spam law) is a horrible, pervasive, invasive piece of legislation that ought to keep you awake at night.