Lexpert Magazine

64 LEXPERT MAGAZINE | JULY/AUGUST 2017 TECHNOLOGY | COLUMNS | George Takach is a senior partner at McCarthy Tétrault LLP and the author of Computer Law. than several years' worth of the business's total revenue, so it reduced the fine to $50,000 — which may seem like a mag- nanimous gesture, but if you've ever run a small business you'll know that it's still a very significant amount. In another case, the CRTC fined a hus- band and wife who run a small print shop $15,000 for sending email ads for their printing business. Turned out the fellow is just scraping by — and frankly, what in heaven's name is the regulator doing going aer folks like this? When the CASL legislation was first be- ing considered in Parliament, the govern- ment officials proposing it said it would be aimed at criminal spammers, the ones clog- ging up the internet. ese two cases don't fit that profile at all. BIGGER FISH ARE BEING FRIED, TOO e CRTC has gone aer bigger targets as well. An airline was fined $150,000 for fail- ing to prove it had consent from all email recipients; plus, the messages did not pro- vide the sender's contact information, and in some of the messages there was no "un- subscribe" mechanism, while it didn't work in the messages that did contain it. e CRTC has been busy in the CASL space. ey also fined a telecommunica- tions company $200,000 for sending out messages with an unsubscribe mechanism that did not work properly. Moreover, when a recipient did unsubscribe, the com- pany did not act on the request within the required 10-day period. e biggest fine issued to date was for $1.1 million, also for sending messages with an unsubscribe mechanism that did not work. Under CASL, the unsubscribe mechanism has to be active in a message for at least 60 days; this company's device did not comply with that requirement. One more case worth noting involved a consumer packaged-goods company, which used a third-party agent to conduct an email advertising campaign. e agent was offside the CASL rules, but of course it was the client company who was found responsible, to the tune of $60,000. PRECARIOUS DUE PROCESS ere are several disturbing themes ema- nating from these cases. e CRTC em- phasizes that the administrative monetary penalty is not intended to "punish" but merely to "promote compliance" with the CASL statute. Accordingly, in the CRTC's view, the legislation does not address "crim- inal" activity, and therefore the standard for determining a violation is a "balance of probabilities" and not the higher "be- yond a reasonable doubt" that is applied in criminal cases. Equally, the CRTC is of the view that that the Charter's "right to be presumed innocent until proven guilty be- yond a reasonable doubt" does not apply to CASL proceedings. Another point of concern is that most CASL complaints are received by the CRTC over the Spam Reporting Centre. In effect, with this bureaucratic vehicle, we are seeing the full weight of the state mobi- lized under the CASL regime. When cou- pled with the investigators we see a formi- dable enforcement edifice indeed, and yet a civil standard of "balance of probabilities" is being utilized. Not quite a level playing field, in my view. SOMETHING EVEN MORE UNBALANCED If the cases above weren't sufficiently dis- concerting, the original CASL legislation provided that on July 1, 2017, the private right of action would come into effect. If you were fairly sanguine about this legis- lation previously, you may have been very concerned about this new remedial vehicle coming on stream. What the PRA would have allowed, af- ter July 1, 2017, is for individuals who feel a violation of CASL has occurred to apply to a judge not only for compensatory dam- ages, but for non-compensatory damages as well. Here's the thing: recovery under the former would have presumably been quite limited, as unwanted emails tend not to generate hard financial losses. Hence the importance of the latter head of recovery: non-compensatory damages. is is where I predicted the initial action would play out, with the class action plain- tiffs' Bar arguing all sorts of claims under this rubric. DUE DILIGENCE DEFENCE ankfully, those of us who defend class actions (among whom I count myself) had a useful arrow in our quiver even under the original CASL statute, namely the due dili- gence defence. e CASL statute expressly provides that a person cannot contravene CASL if they exercised due diligence in at- tempting to comply with the law. While useful, the parameters around a due diligence defence are always uncertain at best. erefore, it was with a real sense of relief that we received the announcement, on June 7, 2017, that on July 1, 2017, the PRA would not be coming into effect. Now there's a birthday present to help celebrate Canada's big day! However, we must remember that the CRTC enforcement provisions of CASL — as highlighted in the cases discussed above — are still very much in effect. A FEDERAL government in Canada that wanted to commit itself to supporting a truly world-class tech sector could start by simply revising CASL to make it align with anti-spam laws in the US. We'll see if the parliamentary committee review ... will take us in that direction

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