Is the private right of action under CASL retroactive?

When Industry Canada determined the coming-into-force date for Canada’s Anti-Spam Legislation (CASL), it wisely decided to delay the private right of action for a period of three years. This is supposed to give businesses some time to figure out the rules before worrying about lawsuits under the private right of action, which allows any person affected by a contravention of CASL (as well as related amendments to the Competition Act and PIPEDA) to sue for actual and/or statutory damages. The last thing the government wants is for a bunch of respected brands following normal business practices to be hit with class action lawsuits for alleged technical contraventions of the law.

A common question though is whether the private right of action could be applied to alleged contraventions that occur before it comes into force on July 1, 2017 (i.e., any time after July 1, 2014). In other words, is the private right of action retroactive? The short answer is that no one really knows for certain.

However, there are a few factors that would seem to weigh against a finding of retroactivity, beyond the fact that it would be unfair.

According to the “modern principle” of statutory interpretation, which has been referenced by the Supreme Court on numerous occasions, “the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament“.  Looking at the broader context and intention of the government, it is clear that the purpose in delaying the private right of action was so that it could not be applied to alleged contraventions occurring before July 1, 2017. A finding to the contrary would  defeat the purpose of delaying the private right of action in the first place.

There are also at least a couple of cases that seem to support the presumption against retroactivity for statutory rights of action. The Ontario Court of Appeal decided against the retrospective application of a right of action under the Combines Investigations Act (replaced by Competition Act). In City National Leasing v. General Motors of Canada, the Court noted: “We find nothing in the legislation…that would warrant us in concluding that it is capable of being given such operation” (thanks to Timothy Banks for pointing this out).

More recently, the BC Court of Appeal found in Round v. MacDonald, Dettwiler and Associates that a right of action under the Securities Act was not retroactive. The Court affirmed the finding of the trial judge, who stated that “retroactive operation of a statute is highly exceptional, whereas prospective operation is the rule“.

So, while we can’t be certain, it appears that statutory rights of action are presumed to apply prospectively, absent exceptional circumstances. With nothing in Act (or the broader context) indicating an intent for retroactive application, hopefully this means that businesses cannot be sued for alleged contraventions occurring before July 1, 2017. Of course, anything that happens after that date will be fair game.

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