Canada Indefinitely Delays Right to File Anti-Spam Law Lawsuits

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By Peter Menyasz

The Canadian government June 7 indefinitely suspended the July 1 effective date for an anti-spam law provision that would have allowed individuals to file enforcement lawsuits.

The Innovation, Science and Economic Development Canada department said a delay in the Canadian Anti-Spam Law (CASL) provision is necessary to ensure that businesses, charities, and nonprofit groups don’t face unnecessary red tape and compliance costs. There needs to be a more balanced approach between consumer protection and any unintended consequences from the CASL’s private lawsuit provision, the government said.

“We have listened to the concerns of stakeholders and are committed to striking the right balance,” Innovation, Science, and Economic Development Minister Navdeep Bains said in a statement.

The department didn’t indicate how long the delay will last, but said it will ask a parliamentary committee to further review the legislation.

The delay in the lawsuit provision was widely expected, and it remains unclear when, if ever, regulations implementing the provision will be adopted, privacy lawyers told Bloomberg BNA.

The anti-spam law, which took effect July 1, 2014, generally prohibits individuals and businesses from sending commercial electronic messages to consumers without their consent. The statute, enforced by the Competition Bureau, Office of the Privacy Commissioner of Canada and the Canadian Radio-television and Telecommunications Commission, sets fines for serious violations of up to C$10 million ($7.4 million) for businesses and C$1 million ($740,000) for individuals.

The private right of action provision would have enabled consumers to sue businesses, other organizations or individuals for compensation for actual losses or damages suffered and expenses incurred due to spam, as well as up to C$200 ($148) per violation to a maximum of C$1 million ($740,000) per day.

Delay Was Expected

Why the government waited until just a few weeks before the lawsuit provision was scheduled to take effect is a “mystery,” Tim Banks, a partner in the Toronto office of Dentons Canada LLP and leader of the firm’s global privacy and cybersecurity practice, said June 7.

Toronto privacy lawyer Barry Sookman, senior partner with McCarthy Tetrault in Toronto, agreed June 7 that the decision wasn’t a surprise. The delay signals that the government is prepared to fix, or at least mitigate, some of the ongoing issues with the CASL.

Canadian business groups welcomed the government’s decision. The Canadian Direct Marketing Association said June 7 it was pleased with the indefinite suspension of the provision, which was expected to provide “fertile ground” for class actions. The group said it worked with the Canadian Chamber of Commerce to highlight its concerns about the lawsuit provision.

The Canadian Federation of Independent Business, which represents the small business community, commended the government June 7 for the delay.

To contact the reporter on this story: Peter Menyasz in Ottawa at correspondents@bna.com

To contact the editor responsible for this story: Donald Aplin at daplin@bna.com

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