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Canada: Anti-Spam Legislation

On 5 December 2013, the federal government announced that Canada’s Anti-Spam Legislation (CASL) will come into effect on 1 July 2014

Thu 29 May 2014

CASL is a new anti-spam law that will apply to all electronic messages (i.e. email, texts) that Canadian organisations send in connection with a “commercial activity”. CASL also regulates programs and mandates that prior consent is given for the installation of software on another person’s computer.

The purpose of the law is to encourage the growth of electronic commerce by ensuring confidence and trust in the marketplace. To do so, CASL deters damaging and deceptive forms of spam from occurring in Canada.

The law will primarily apply to Lloyd’s coverholders, service companies and intermediaries domiciled in Canada. However, CASL has a significant extraterritorial effect. If a Lloyd’s managing agent or broker sends email, text messages, or direct messages over social media to electronic addresses in Canada or from Canada to anywhere in the world, CASL applies to that firm.

CASL’s key feature is that it regulates Commercial Electronic Messages (CEMs) and requires Canadian and global organisations that send CEMs within, from or to Canada to receive prior opt-in consent – from both new prospects and existing contacts -- before sending messages. Consent can either be express or implied. Express consent can either be written or oral consent. While implied consent means the consent that may be implied by virtue of any number of different scenarios stated in the CASL, including the sender and recipient having an “existing business relationship” or an “existing non business relationship”.

Commercial Electronic message (CEM) is defined as any electronic message that encourages participation in a commercial activity such as an email that contains a coupon or tells customers about a promotion or sale, regardless of whether there is an expectation of profit.

CASL also mandates that any CEM meet certain requirements as to form, and that the message include certain prescribed information about the sender and provide an easy-to-use unsubscribed mechanism.

There are a number of exemptions to the CEM consent requirements. These exemptions fall under CASL, or under the Industry Canada Electronic Commercial Protection Regulations (“IC Regulations”).  The IC regulations can be found here.

Examples of the exemptions include business to business messages where there is an existing relationship between the parties and messages sent in response to a consumer enquiry, complaint or request for a quote.

CASL will come into force in three phases:

  • Phase 1 - 1 July 2014: Core anti-spam provisions, businesses will be required to have express opt-in consent.
  • Phase 2 - 15 January 2015: Prohibitions relating to computer programs.
  • Phase 3 - 1 July 2017: Private right of action.

Businesses will have a three-year grace period after July 1, 2014 to verify and confirm consent from consumers.

It will pay to be prepared as the penalties for not complying with the new anti-spam act are severe -- CASL provides for penalties of up to $1 million for individuals and up to $10 million for corporations and other business entities.

Additionally, corporate personnel and directors can be held personally liable for the violations of their firms and CASL introduces a private right of action from 1 July 2017. This will allow individuals to bring an action for contravention of the legislation.

We encourage Lloyd’s managing agents to get a head start and act now to assess the current status of their and their agents’ email lists and prepare to transition to CASL compliance and ensure that they are maintaining CASL guidelines across all of their messaging.

We encourage you to seek legal counsel if you have questions or need additional guidance about this new law.

This article reproduces a report distributed in Canada by Lloyd’s Canada.