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CASL: Personal Liability Exposure for Directors and Officers

An article from September 15, 2017 on underscores the point that an organization’s directors and officers can be potentially liable for a CASL infraction. The article also offers a few steps to help protect directors and officers of an organization from personal liability.

CASL’s anti-spam sections came into force on July 1, 2014. Every organization that CASL affects should now be complying with it – and their directors and officers need to make sure they do. CASL opens directors and officers up to personal liability for violations of it, so every director and officer must think about limiting her personal exposure. Here are five steps to get that process started.

Director and Officer Liability.
CASL expressly extends legal responsibility to both an organization’s directors and its officers. CASL says that an organization’s officers, directors and agents can be personally liable if the organization contravenes CASL, regardless of whether the Canadian Radio and Television Commission (the CRTC, the main agency charged with CASL’s administration) proceeds against the offending organization itself. To be personally liable, the officer, director, or agent must have:

  • directed the violation;
  • authorized the violation;
  • assented (somehow agreed) to the violation;
  • acquiesced in the violation (knew about it and allowed it to happen); or
    otherwise participated in the violation.

Click here to read the full article

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Is the CASL PRA Delay Bad for Canadians and Businesses?

Peter Clausi has written an interesting article on InvestorIntel about the CASL Private Right of Action delay and what the unintended fallout could be:

With the July 1 date three weeks away, and the prospect of class action litigation against every company not in compliance, companies were finally taking CASL seriously and were sprinting to get Human Resources, Legal, IT and the executive offices working together to remediate the situation. The CASL system was working.

This week, 12 years after that report from its own Task Force, the federal government failed Canadians by derailing its own system. By order in council, the enactment of the PRA has been indefinitely delayed. There is no visibility on when or even if this part of the legislation will become active.

So what’s next? Remember when you were young, and your older sibling got in trouble with mom, then that sibling passed it on and took it out on you. Expect the same to happen here. The CRTC is in our opinion going to ramp up its enforcement efforts and pass on Minister Bains’ insult to Canadian companies. We expect to hear of new enforcement actions by the CRTC under CASL over the next few weeks.

Click here to read the full article

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CASL Private Right of Action Delayed

Last week, by an order-in-council of the Government of Canada, the private right of action provisions in CASL were delayed. There has been mixed reactions to this delay depending on who you talk to, but Fazila Nurani, of Privatech has taken a good look at what this delay means for businesses and how CASL is still effecting them.

It is important to remember that CASL otherwise remains in full force and is being actively enforced by the CRTC – we have witnessed a number of decisions where administrative monetary penalties (AMPs) have been issued against reputable organizations, and businesses of all sizes from the one-man show to the large national operation. Entities should also keep in mind that the transition period that grandfathered certain pre-CASL “existing business relationships” will end as scheduled on July 1st of this year.

Click here to read the full article

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New CASL Deadline Looms

In the May 15, 2017 issue of HR Reporter Sarah Dobson has written up a great piece on the upcoming July 1st deadline when CASL’s private right of action comes into force.

As a class action, there’s a significant amount of money potentially at stake. So that’s caught a lot of people’s attention. So a lot of companies are reviewing their CASL compliance efforts that they’ve put into place one, two, three years ago to make sure they’re actually being followed and their efforts are up to date.”
It’s going to be interesting to see how the tribunal interprets the legislation because it’s possible this right of action can be taken without any proof of damages, relying on the $200 provision, said Antoine Aylwin, a partner at Fasken Martineau in Montreal.
“If the tribunal accepts that principle, we could very well see many class actions taken and it goes fast — when you send an email to 1,000 persons, well, it’s $200,000 per communication, so say you send five, you’re at $1 million, just by the mathematics of it.”

Click here to read the full article as a PDF

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A panel comprised of recently retired GM Canada General Counsel, Heather Innes; current Bell Canada General Counsel, Bill Abbott; and Peter Clausi, General Counsel at GTA Resources and Mining and moderated by Neil Beaton, VP Corporate Development with CASL Cure, gave the CCCA member-audience an overview of issues surrounding the hot topic of the law’s upcoming private-right-of-action evolution which will open up CASL to allow class action suits, alongside the current CRTC regulation.

On July 1, a “private right of action” comes into force, opening the door for plaintiff-side class action lawyers to sue companies for alleged breaches of the law. This changes the game, because up till now companies in breach of the law have only had to answer to government regulators.Heather Innes, who was previously chief privacy officer with General Motors of Canada Ltd., said the regulatory actions have been harsher than most corporate counsel had expected. But they also offer a preview as to how easy it can be for a company to violate the law.

“Even the most sophisticated organization can make mistakes,” Innes told the panel. The regulators mean business, she said. “They are going to fine, and they are going to fine even if people have simply made mistakes.”

Bill Abbott, assistant general counsel and privacy ombudsman with Bell Canada, said that regulatory enforcement has focused on clear violations of the law. He expects class action lawyers to cast a wider net with their claims.

“Private right of action brings an entirely different environment with profit-driven plaintiffs who aren’t restricted by policy,” Abbott said. “Unlike the CRTC, which appears to be avoiding the ambiguous areas, that’s what they play on. That’s where they bring claims.”

Please visit the Financial Post Article for more information.

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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.

For more visit their article here or download the PDF version here.