What's it all about? How anti-spam legislation can affect your firm

  • March 18, 2009
  • Ava Chisling

The first thing you should know about the new "anti-spam" legislation is that it is not about spam - it is about you and your business, and it matters a great deal. A failure to understand this point before the law comes into force can put you and your firm at serious risk.

Shortened from the very long An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act, the Act became known as CASL (Canada's Anti-Spam Law), presumably because it is much easier to say. But to sum up this wide-reaching important law as "anti-spam" is misleading. Yes, CASL will apply to those who send mass emails promoting ridiculous products, but it also applies to every single commercial electronic message (CEM) sent in Canada: every email, every text message, from every person, company and organization. And that is why this new law matters.

"People see the anti-spam title in newspapers and in articles and think that it doesn’t apply to them because in their minds, they don't send spam. They are already careful in who they send messages to," says Alexandra Nicol, who specializes in regulatory affairs at Borden Ladner Gervais. "But CASL targets all commercial electronic messages. This is a legislation that involves a great number of authorities and that should have been a good indication to people that it will have a wide impact."

CASL is expected to come into force later this year. It amends the various Acts listed in its long title and it imposes new requirements on CEMs. This means your emails and texts have to comply with both the applicable privacy laws and with CASL, and this may not be easy for the solo or small firm. In short, with limited exceptions, you will no longer be able to send a commercial email or text message to anyone who has not provided you with consent in advance. And if you do obtain the required consent, your message must comply with content rules, mostly involving stating your identity and allowing the recipient to withdraw consent/unsubscribe at any time. "CASL applies to any message sent to an electronic address, which includes email, an instant messaging account, a telephone account, or anything similar," says Nicol.

A commercial electronic message is defined as "any electronic message that encourages participation in a commercial activity, regardless of whether there is an expectation of profit." Says Nicol: "The content of the message and the intent of the message is what will be used to determine if it is commercial or not. Are you providing a link to your website? Are you sending it on behalf of your firm or yourself? It can be interpreted very broadly." The law applies to all computer systems located or accessed in Canada, regardless of where the sender or recipient is located. Employers can be held vicariously liable for the actions of their employees, and directors/officers can be held to be personally liable if they instruct others to contravene CASL.

It is important to note that even one email can be a problem, which is another reason why the word "spam" is misleading. You do not have to send out an email blast or a group email to contravene CASL. Any one of your emails or texts, sent to a single person, can be problematic if you do not obtain consent and follow the rules with care. Says Nicol: "If you go through all the electronic messages you send through your company, I think you will find that most of them will be caught under CASL in the commercial EM category. Even if there is not an immediate pay-off, usually the intent of sending a message from your company is to encourage participation in your business."

Not complying with CASL can cost you $1 million (individual) or $10 million (company). You can also incur unlimited fines or imprisonment for false or misleading messages. And not only can you be fined by a regulatory body, you can also be sued by the general public. An individual or a group of individuals can seek $200 per message received or $1 million per day, plus compensatory damages, according to Nicol.

So what does all this mean to the small firm or solo lawyer? It means that your usual course of business may need reassessing. If you send out monthly legal bulletins, press releases, links to your website, a summary of your blog or a list of your services, you will have to obtain the consent of every recipient in advance, unless they fall into the list of limited exceptions (friends, family, an existing relationship, to name a few).

Requiring consent in advance will have a Catch-22 effect on businesses: How can you obtain consent from a potential client if you are not allowed to contact the potential client to get consent? "It makes it so if you want to 'electronic cold call,' you are very limited in this respect," says Nicol. This will affect small firms much more than big firms. Larger companies can simply switch from online marketing to offline marketing (direct mail campaigns, for example). They have the budget for traditional advertising and for sponsoring high-profile events. "[BLG] sends off bulletins to thousands of people that are on our distribution list. We do that in the hopes that businesses might have questions for us and perhaps become our clients or give us additional business. Law firms are not exempt from CASL's requirements and we take them very seriously."

Although all businesses are involved in electronic communications, some of CASL's requirements may be a lot for a very small business to handle. "They have to develop policies for their messages and start obtaining consent now," says Nicol. "This is the new reality. We have had a free for all with all kinds of different forms of promotion and advertising and marketing, which is great, but the government saw the possibility of abuse and took steps to protect consumers."

Since CASL is not yet in force, there are steps you should be taking right now. "Make note of where you are getting [a potential client's] information from before sending CEMs," says Nicol. "Mark down the types of consent you are getting and where you are getting it from - if you collect business cards at functions, for example. People can start adapting the way that they market now, in light of CASL and focus on different avenues that involve more one on one contact."

The ultimate effect of CASL, says Nicol, is that it may mean reverting to old school methods of advertising, where face to face contact becomes crucial to obtain new business. This might include speaking for free in your community, joining online groups, sponsoring local events, being active on popular websites like Facebook and Twitter, and lastly, make certain you can be found. This last point usually requires developing a website for your practice that is constantly updated and contains information that is of interest to the public at large.

Nicol believes no one will want to be the test case for this legislation. "You do not want to be that company that someone brings a class action against, and you don't want to be the company that the regulatory bodies decide to investigate." There will likely be some heavy penalties in those first test cases. Take steps now to make sure it's not you who will be paying them.

The CRTC recently released its final version of the anti-spam regulations earlier this month; Industry Canada is expected to follow shortly.