Jillian Swartz of Allen McDonald Swartz LLP has published an excellent article discussing the impending danger of class action lawsuits under CASL coming into effect on July 1st, 2017.
On July 1, 2017, CASL’s private right of action provisions, which provide for penalties of up to Cdn$1,000,000 per day, will come into effect. Class actions are almost a certainty. Any Canadian business (and any business that has customers, donors or contacts in Canada) that is not fully compliant with CASL must act now to develop and implement robust compliance strategies in order to mitigate its class action risk.
CASL provides for a private right of action. This means that, in addition to the risk that the regulators may bring an enforcement action against an organization that violates CASL, there is a potential for individuals, partnerships, corporations, organizations, etc. (or more aptly, a group of such persons) to bring a lawsuit against an organization that has breached CASL. There is a risk of high damages awards under CASL. The following chart summarizes the potential damages that a court may award.
As a result of the potential for high damages awards, it is likely that CASL litigation will become the next trend in class action litigation. It is also important to note that the CRTC, because it has limited resources to pursue enforcement action, has been focusing on the worst offenders. Class action lawyers are not similarly restrained, so it is likely that they will aggressively pursue organizations that have allegedly violated CASL. The class action risk is heightened because CASL allows a court to impose a monetary award without any proof that actual damages have been sustained.
An employer can be held liable where an employee violates CASL while acting within the scope of his or her employment, unless the employer can show that it exercised due diligence to prevent the violation. In addition, it is an offense to aid, induce, procure or cause to be procured the sending of CEMs in violation of CASL.