EDITOR: | January 13th, 2017 | 4 Comments

CASL – imposing fines to work.

| January 13, 2017 | 4 Comments

What do the NFL Playoffs and CASL have in common? Freakonomics

Last September we looked at the NFL preseason, with the NFL imposing fines after the games for activities carried out during preseason play. The Commissioner’s office wanted to shape behaviour and used monetary penalties to effect the change it wanted, before the regular season began.

At that time we said, “The NFL told its teams that it would be enforcing the roughing rules more closely, and has followed through on that with financial penalties. Other players have to be taking notice and consequently changing how they play the game to comply with the rules.”

Now the regular season is over and we’re in the playoffs. The NFL is not levying those same fines, which leads one to believe the underlying behaviour has changed, meaning the financial penalties worked. The players are playing the game differently. Levitt and Dubner at Freakonomics would be impressed.

Freakonomics was an immensely influential book. Published in 2005, in addition to being fun and witty, it was one of the first books to bring data mining to the masses, showing how fresh looks at data can describe why people behave the way they do. Levitt and Dubner theorized that social, moral and financial incentives could explain why teachers cheated in Chicago, why the USA’s national violent crime rate fell, why sumo wrestling in Japan is often as scripted as the WWE, and why good parenting could have minimal impact on a child’s education.

Levitt and Dubner described the world as a system of intentional and accidental moral, social and financial incentives working  as push/pull levers to shape behaviour. Their work is as much sociology as it is economics. But it’s hard to argue with this theory, that incentives can cause us to change our behaviour.

This is the theory that has been embraced by the CRTC  (Canada’s Radio-Television and Telecommunications Commission). Created in 1976 to regulate broadcasting and telecommunications, the CRTC’s jurisdiction has crept into the enforcement of internet-related regulatory issues, which means the CRTC is the primary body enforcing Canada’s AntiSpam Legislation (CASL).

The CRTC has been levying Administrative Financial Penalties since CASL came into force in July, 2014. New rules governing computer programs came into force the following January. The CRTC has named the violators, punished them, and advertised the results so as to shape the behaviour of everyone subject to the law. The CRTC has even obtained two warrants to enter business premises to enforce CASL.

Visit the CRTC’s website here for the statute itself, the regulations, and the penalties already levied. The CRTC has defined the high standards it expects to be observed, and has made it clear that it won’t take violations lightly.

The NFL might be in the playoffs but CASL is just finishing its preseason. The regular season begins July 1, 2017.

That date is when a new private right of action is created by statute. In other words, if you send someone an email, and you can’t prove you had prior consent to send it, the person receiving that email can sue you. The onus is on you as the sender to prove consent, not on the recipient to disprove it.

Even worse for the sender of email, damages are assumed, which means the plaintiff is assumed to have been monetarily hurt by receiving an unwanted email. Further, this private right of action supports class action litigation.

If you want to research the basics of CASL and why your highly-paid defence lawyers will be very happy you’re not in compliance, go here. Please note this doesn’t apply only to what is typically thought of as ‘spam’; CASL applies to every email and text message you send.

Are you ready for CASL’s regular season? As we’ve said before, the CRTC has made it clear that a CASL-compliant model includes:

  1. a senior executive to champion the creation and implementation of your compliance model
  2. a senior executive to supervise compliance and respond to potential breaches
  3. Human Resources to add sections to the Employee Handbook on the proper use of email addresses and phone numbers
  4. initial training of all staff, directors and management
  5. annual testing to ensure continued compliance
  6. a technology model that has been architected to achieve all the business goals set out in CASL and as interpreted by the CRTC
  7. initial and on-going stress testing of the system

The incentives are in place to shape CASL-compliant behaviour. Perhaps CASL and its impacts can be a chapter in the next instalment of Freakonomics.


Mr. Clausi is an experienced investment banker, executive, director and shareholder activist. A graduate of Osgoode Hall Law School called to Ontario's bar in 1990, ... <Read more about Peter Clausi>

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  • Neil Lock

    Great Article Peter! Emails aren’t effective – easy to delete.

    January 13, 2017 - 1:15 PM

  • Peter Clausi

    BLG LLP identified cyber-security as one of the Top 10 Legal Risks for Business in 2017. You can access the bulletin here.​

    January 16, 2017 - 9:53 AM

  • The CRTC War on Spam starts nailing the little man

    […] will get worse on July 1, 2017. As we’ve pointed out before (most recently here) that is when a new private right of action (PRA) is created by CASL. In other words, if you send […]

    March 12, 2017 - 1:38 PM

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    […] under CASL was due to be effective July 1, 2017. Prior articles on CASL and the PRA can be found here and then going back through the […]

    June 12, 2017 - 4:44 PM

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