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Canada’s Anti-Spam Legislation – The Honeymoon is Over July 1st

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CASL’s (Canada’s Anti-Spam Legislation) three-year transition period ends on July 1st, 2017. Before you celebrate our sesquicentennial, you might want to call your insurance broker, lawyer, and IT professional—plus, educate yourself and all your employees.

What is CASL?

On Canada Day 2014, CASL came into effect. It applies to “commercial electronic messages” (CEMs), which are ones whose “purpose is to encourage participation in a commercial activity”. An “electronic message” has been defined to include e-mail, text, sound, voice and image messages.

Its purpose is to reduce “the harmful effects of spam and related threats to electronic commerce and are working towards a safer and more secure online marketplace. Canada’s new anti-spam legislation (CASL) helps protect Canadians while ensuring that businesses can continue to compete in the global marketplace.”[1]

Senders of commercial electronic messages that are regulated by CASL must now obtain “consent” to send a message before the message is sent and include certain information in the message.

For more details about CASL see our article Canada’s New Anti-Spam Law: The Basics.

Does This Apply to an Association or a Registered Charity?

CASL applies to associations and registered charities.

“Consent may be implied where CEMs are sent to members of an association, club or voluntary organization. When sending CEMs to your membership based on implied consent, you should ensure that you are only sending to members.”

“The CEM must still respect the other two requirements – it must contain the identification information and unsubscribe mechanism.”[2]

Registered charities are exempt if the primary purpose of the message is fund raising.

What Changes on July 1, 2017?

The three-year implied consent period to receive email ends. During the three-year transition an association had “implied contest” to send an email if it had any previous relationship. There was previously no period restriction.

After July 1, 2017:

• Implied consent is now only applicable if you have had a relationship within the last two-years from the date of CEM being sent

To ensure that you have consent, your association may wish to consider sending an email seeking consent from the organizations and/or people who you have been sending email

• The email you send must make it is easy to unsubscribe for the person who is receiving the email

• Directors and offices of an association can be personally liable if “they directed, authorized, assented to, acquiesced in, or participated in the commission of the offence” under the CASL; this can include the actions of an employee

Right of Private Action Suspended

On June 7, 2017 the Government of Canada suspended the implementation of the private right of action under CASL, originally scheduled to come into force on July 1, 2017.

The suspension applies to the private right of action, which would have allowed lawsuits to be filed against individuals and organizations for alleged violations of the legislation.

This is good news “under the private right of action, organizations (as well as their officers, directors and agents) could be sued by anyone claiming to have been “affected” by an act or omission that violated CASL. Plaintiffs could claim both compensatory damages (for any actual losses or damages they may have suffered) as well as statutory damages, which in some circumstances could be up to $1 million per day, even where no actual harm was proven.”[3]

Will Our Insurance Protect Us?

Like most insurance policies, not-for-profit Directors and Officers (D&O) Liability insurance (D&O) policies do not provide coverage for claims resulting from an “intentional act”.  In other words, if a director or an officer provided direction that intentionally violated the CASL provisions then no coverage would be provided by the insurer.

Some D&O policies provide no coverage for punitive damages awarded by courts. While in Canada, punitive damages are very rare, CASL does provide for punitive damages. This means that you should ask your insurance broker if your D&O policy covers punitive damages. If it does not, then your board can make an informed decision if it wants to add punitive damages coverage.

Finally, a “due diligence defence” is typically utilized by defence lawyers when defending the non-profit board.  This means that if the board was diligent in their oversight when executing their duties then the directors and officers should be exonerated from the claim.  However, it could be argued that CASL violations are really a result of a lack of due diligence and proper oversight. To protect your association, make sure that you have clear CASL procedures.

Keeping Up-To-Date on Privacy

Osler is, a Toronto law office, and their “AccessPrivacy service offerings help organizations in the public, private and not-for-profit sectors to develop a strategic approach to privacy and information management, supported by sound policies and practices.”

You can sign-up to receive their no-cost newsletter at accessprivacy.com/subscribe.

As an association management company and as event managers, we present the above article for information purposes only. It constitutes general information and does not constitute legal or other professional advice.

[1] crtc.gc.ca/eng/internet/anti.htm

[2] crtc.gc.ca/eng/com500/faq500.htm

[3] osler.com/en/resources/regulations/2017/canadian-government-suspends-casl-private-right-of

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