CANADIAN CASL (ANTI-SPAM LAW) PRECEDENTS
Do you need a precedent or checklist
to comply with CASL (Canadian anti-spam law)?
We offer Canadian anti-spam law (CASL) precedents and checklists to help electronic marketers comply with CASL. These include checklists and precedents for express consent requests (including on behalf of third parties), sender identification information, unsubscribe mechanisms, business related exemptions and types of implied consent and documenting consent and scrubbing distribution lists. We also offer a CASL corporate compliance program. For more information or to order, see: Anti-Spam (CASL) Precedents/Forms. If you would like to discuss CASL legal advice or for other advertising or marketing in Canada, including contests/sweepstakes, contact us: contact.
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On July 1, 2014, Canada’s new federal anti-spam legislation (CASL) largely came into force. Since it was introduced, both the CRTC (the primary enforcement body) and the Competition Bureau have been enforcing the legislation, with penalties to date ranging from $48,000 to $1.1 million.
Beginning on July 1, 2017, however, the risks of violating CASL, as well as related sections of PIPEDA (the Personal Information Protection and Electronic Documents Act) and the Competition Act, will be significantly greater. This is because private individuals and organizations affected by a violation of CASL will have a right to commence private actions when sections 47 to 51 and 55 come into force.
In general, the new private right of action will allow private parties (i.e., as opposed to the federal regulators) to commence applications to recover damages, which, in some cases, could be assessed to be as much as $1 million a day.
Overview of CASL
In general, CASL creates an opt-in regime for commercial electronic marketing. It requires express or implied consent for the sending of commercial electronic messages and imposes certain form (i.e., disclosure) and un-subscribe requirements for electronic communications.
CASL is relevant to individuals, companies and other organizations that engage in electronic marketing, such as e-mail, text messaging, instant messaging and some types of social media marketing.
CASL also imposes consent requirements for some other types of electronic practices, namely altering transmission data in electronic messages and the installation of computer programs on other persons’ computer systems.
In addition, CASL has broadened the Competition Bureau’s power to regulate misleading advertising in the context of electronic communications – for example, misleading representations made electronically, such as in sender information, subject matter information and electronic messages or locators. In this regard, new electronic marketing sections were added to the Competition Act (under section 74.011).
Currently, violating CASL can result in significant penalties of up to $1 million for individuals and $10 million for corporations.
Key Points About CASL (Canadian Anti-Spam Law)
Private Action Rights
The following are some of the key points about the private right of action sections of CASL, which will come into force on July 1, 2017:
Who has standing: Section 47(1) of CASL provides that “a person” may apply for a court order, which is defined very broadly to include an individual, corporation, organization, association or legal representative.
Causes of action: Private actions may be brought for violations of CASL and also PIPEDA and the electronic marketing sections of the Competition Act (under section 74.011).
Pleading formalities: An application under the private action provisions of CASL will be subject to several formalities, including serving the application on both the respondent and the relevant enforcement agency or agencies.
Required harm: Actions may be brought based on actual loss or damage suffered. However, a court may also award statutory damages based merely on the number and duration of violations of CASL, PIPEDA or the electronic marketing sections of the Competition Act.
Limitation period: Private actions must be brought within three years of being discovered by the applicant (i.e., will be subject to the discoverability principle), unless otherwise ordered by a court.
Damages: On a successful application, an applicant may be awarded compensation for the actual loss or damage they have suffered (and expenses). Importantly, a court may also award statutory damages, which include: (i) $200 per violation up to $1 million a day for contravening section 6 of CASL (unsolicited electronic messages); (ii) $1 million a day for violation of sections 7 or 8 (altering transmission data and unauthorized installation of computer programs); and (iii) $200 per violation up to $1 million a day for contravening the electronic marketing sections of the Competition Act.
Aiding a violation: In addition to the above penalties, aiding, inducing or procuring a violation of CASL may also result in liability once the private action provisions of CASL come into force with a potential penalty of up to $1 million per day.
Director and officer liability: CASL also exposes senior officers to potential liability. In this respect, section 52 of CASL provides officers, directors or agents of a corporation that directed, authorized, assented to or participated in a violation of CASL (or related provisions of PIPEDA or the Competition Act) are also liable for the violation, regardless of whether the corporation is proceeded against.
Factors for assessing penalties: A court must consider a number of factors when assessing penalties. These include the type and scope of the violation, any prior violations, financial benefits and ability to pay.
Joint and several liability: Once the private action provisions are in force, parties that violate CASL are potentially jointly and severally liable for court awards.
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Tips For Complying With
CASL (Canadian Anti-Spam Law)
Canada’s federal anti-spam legislation (CASL) came into force in 2014. Since then, electronic marketers and their advisors have been working to comply with what remains a complex law with outstanding uncertainties in some key areas. Having said that, many of the core requirements of CASL are not overly difficult to comply with (though continue to be misunderstood in many cases).
The following are some key legal tips for complying with CASL:
Express Consent. If you cannot rely on any category of implied consent (e.g., an existing business relationship within two years of a purchase) or a CASL exemption, ensure that you have collected and documented express consent from recipients. Express consent requests must include all of the information set out in CASL and its regulations otherwise the consent will not be valid. Failure to correctly collect consent is the most common CASL compliance error we see and a key basis for CRTC enforcement. For more information, see: Anti-Spam Law (CASL), Anti-Spam Law (CASL) FAQs and Canadian Anti-Spam (CASL) Precedents.
Implied Consent. If you are relying on one or more categories of implied consent to send commercial electronic messages (CEMs) (e.g., an existing business relationship within two years of a purchase or six months of a product inquiry) ensure that all of the requirements of the particular type of implied consent are met. Remember that there is not a single blanket type of implied consent under CASL; rather, there are many different types of implied consent each with their own specific requirements. Also, as with express consent, CEMs that rely on implied consent must still include the prescribed sender identification information and unsubscribe mechanism. For more information, see: Anti-Spam Law (CASL), Anti-Spam Law (CASL) FAQs and Canadian Anti-Spam (CASL) Precedents.
Consent For Third Parties To Send CEMs. Under CASL, consent to send CEMs can be requested for a sender themselves, identified third parties (or multiple identified third parties) or unidentified third parties (i.e., entities whose identities are not yet known when consent is requested). Importantly, however, each type of consent request has specific requirements for the request and, in the case of consent requests on behalf of unidentified third parties, somewhat complex additional requirements. The failure of marketers to correctly request consent for third parties (e.g., partners, affiliates, co-sponsors in promotions, etc.) is another CASL-related error that we regularly see. For more information, see: Anti-Spam Law (CASL) FAQs and Canadian Anti-Spam (CASL) Precedents.
CASL Exemptions. Similar to implied consent, there is no single exemption from CASL but many types of exemptions. If you are relying on a particular exemption (e.g., the “business-to-business” exemption) it is important to ensure that all of the requirements of the exemption are met. Importantly, there is little or no case law interpreting many CASL exemptions. This means that there there may be more risk when relying on an exemption than express consent. Express consent is the strongest type of consent under CASL, considering that it does not expire unless a recipient unsubscribes.
Passive Consents. Remember that under CASL express consent or a category of implied consent is generally required to send CEMs unless a CASL exemption applies. As such, passive types of consents (e.g., language in general terms and conditions) will likely not be CASL compliant unless a sender does not need express consent (i.e., can rely on a category of implied consent or a CASL exemption).
Sharing Lists With Third Parties. Consider the potential risks of sharing e-mail or other electronic marketing lists with third parties. While this is certainly possible under CASL, marketers should be aware that there are specific requirements that must be met depending on who a list will be shared with (e.g., to expressly identify third parties with whom consent is being gathered on behalf of, including their contact information and other requirements for unidentified third parties). Marketers should also be aware that there is also potentially not only risk if they themselves violate CASL (e.g., send CEMs without consent), but also if they assist third parties that violate CASL. As such, it is often prudent for marketers that want to share electronic marketing lists with third parties to ensure that they have list sharing agreements in place with parties with whom they share e-mails. For more information, see: Anti-Spam Law (CASL) FAQs, Anti-Spam (CASL) Compliance Errors and Canadian Anti-Spam (CASL) Precedents. See also: Influencer, Co-Sponsor and List Sharing Agreements.
Sender Identification Information. Ensure that all CEMs include the prescribed sender identification information required by CASL unless an exemption applies. For more information, see: Anti-Spam Law (CASL) and Anti-Spam Law (CASL) FAQs.
Unsubscribe Mechanism. Ensure that all CEMs include a CASL-compliant unsubscribe mechanism. For more information, see: Anti-Spam Law (CASL) and Anti-Spam Law (CASL) FAQs.
Document Consent. Under CASL, the onus is on senders of CEMs to document consent. As such, it is important to document the type of consent (express or implied) or exemption being relied upon, evidence of consent (e.g., subscription logs, forms, dates and names/e-mail addresses), divide lists according to the type of consent or exemption being relied upon and to scrub lists after recipients have unsubscribed or the relevant time period for a category of implied consent has expired (e.g., two years after a purchase). Failure to adequately document consent is another CASL-related compliance error that we regularly see, including not documenting consent at all, not segregating distribution lists and inadequately documenting consents or types of implied consent. For more information, see: Anti-Spam Law (CASL), Anti-Spam Law (CASL) Compliance and Canadian Anti-Spam (CASL) Precedents.
CASL Compliance Program. Consider adopting a CASL compliance program, particularly if electronic marketing is a core aspect of your marketing strategy. The CRTC has issued guidance on CASL compliance programs including key recommended elements. For more information, see: Anti-Spam (CASL) Compliance and Canadian Anti-Spam (CASL) Precedents.
CASL and Specific Types of Promotions. Care should be taken in relation to specific types of promotions under CASL. Just one of many examples is friends and family type promotions (e.g., contests where entrants can gain more entries by sharing with or tagging a friend or family member). While there is an exception to the unsolicited CEMs section of CASL (section 6) for messages sent to a person with whom the sender has a personal or family relationship, these terms are narrowly defined. For example, “family relationship” is limited to spouses, common-law partners and parent-child relationships. “Personal relationship” is defined in a multi-factor and case-by-case fashion such that it is often impractical to rely on this exception for any broad “friends and family” type promotion. Marketers should also be aware that there is potential risk for both themselves and their clients in running friends and family type promotions if they cannot meet the specific definitions of “family relationship” and/or “personal relationship” under CASL for a promotion. For more information, see: Anti-Spam (CASL) Compliance Errors and Running a Friends-and-Family Promotion in Canada? Cruel, Cryptic CASL Strikes Again.
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SERVICES AND CONTACT
I am a Toronto competition/antitrust lawyer and advertising/marketing lawyer who helps clients in Toronto, Canada and the US practically navigate Canada’s advertising and marketing laws and offers Canadian advertising/marketing law services in relation to print, online, new media, social media and e-mail marketing.
My Canadian advertising/marketing law services include advice in relation to: anti-spam legislation (CASL); Competition Bureau complaints; the general misleading advertising provisions of the federal Competition Act; Internet, new media and social media advertising and marketing; promotional contests (sweepstakes); and sales and promotions. I also provide advice relating to specific types of advertising issues, including performance claims, testimonials, disclaimers, drip pricing, astroturfing and native advertising.
For more information about my services, see: services
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