Canada: Ashley Madison – A New Era In Privacy Class Actions For Canada?

Last Updated: October 5 2015
Article by Lyndsay A. Wasser and Rohan Hill

In recent years, the phrase "data breach" has firmly established its place in the public vernacular, and it is not difficult to understand why this has occurred. In the past 3 to 5 years, the seemingly constant barrage of high profile "hacking" incidents have served as a reminder that it is not only web-centric companies that can suffer the embarrassment of a privacy or data security breach. It seems that no organization is safe from these attacks. Online retailers, brick and mortar shops, government bodies, private banks, health care providers, airlines, social networks, movie studios, and now dating sites, have all been targeted. The sheer variety of companies who have been recent victims of a data breach demonstrates that, as the end of 2015 nears, data security should be top of mind for every business that has sensitive or private electronic data that they want to protect.

The latest high profile attack targeted the dating website Ashley Madison. Ashley Madison's slogan is "Life is short. Have an affair" and as of writing they continue to promote themselves as "the world's leading married dating service for discreet encounters". [emphasis in original]

In mid July, 2015, a group identifying themselves as the "Impact Team" made an open allegation that they had taken over Ashley Madison's systems, and threatened to release customer records, profiles, and other compromised data within their control, if Ashley Madison did not shut down immediately and permanently. On August 18, 2015, the group followed through on this ultimatum, publically releasing information relating to what has been variously estimated at between 30 and 40 million Ashley Madison user profiles. In addition to containing names and other personal information, the leaked data is reported to include seven years worth of payment transaction details. Furthermore, the leaked data contained personal information of users who had previously paid Ashley Madison to delete their personal information.

While the reputational impact of this data breach may, itself, prove to be a significant challenge for Ashley Madison, the breach has also triggered a number of class proceedings both north and south of the border. This may be old news for the United States, since they have seen a myriad of class action lawsuits following cyber attacks in recent years. However, this is a relatively novel case in Canada, where prior privacy-related class actions have centered around cases of lost portable media devices containing sensitive personal information (and other employee errors) as well as employee "snooping" cases. In these earlier cases, the argument could be made that the company should be vicariously liable for the actions and omissions of their employees. However, the concept that an organization should also potentially be held liable for the consequences of being victimized by cyber criminals is relatively new to Canada.

In August class action proceedings were commenced in Ontario, alleging that Ashley Madison's parent companies Avid Dating and Avid Life are liable to the representative plaintiff and class members for breach of contract, breach of Ontario's Consumer Protection Act, negligence, intrusion upon seclusion, breach of privacy, and publicity given to private life, and it seeks general damages in the amount of $750 million dollars. The representative plaintiff claims to be a disabled retiree who lost his wife of 30 years to breast cancer, and joined Ashley Madison to seek companionship.

Class proceedings against Avid Dating and/or Avid Life have also been commenced in the United States, in (as of writing) at least 8 states. In addition to the causes of action contemplated in the Ontario proceedings, the US pleadings also variously allege intentional infliction of emotional distress, bailment, conversion, unjust enrichment, fraud, and violations of various state and federal communications, trade practice, merchandising, and identity theft statutes.

Central to the array of ongoing litigation are allegations that Ashley Madison failed to exercise reasonable care or take reasonable or appropriate steps to safeguard member data before or after breach, failed to disclose the breach in a timely and transparent manner and made false representations, or breached contract, with respect to their paid data deletion service. While the various proceedings are still in very early stages, it will be useful to monitor this litigation to see how the courts deal with a number of unsettled legal issues, such as:

  • Is there a duty of care to customers with respect to protecting their personal information?

  • If a duty of care exists, what is the standard of care? For example, what constitutes reasonable or industry standard safeguards in the era of seemingly constant high profile breaches?

  • Will Canadian courts impose liability on companies that have been victims of cyber attacks, for the consequences of such attacks?

  • What legal obligations exist with respect to breach response and/or notification, especially under common law if statutory gaps exist?

  • Does the tort of intrusion upon seclusion apply to data breaches caused by cyber attacks? If not, will the courts be prepared to create a new tort to address such situations? Or will these types of claims be decided under existing causes of action, such as negligence and breach of contract?

  • Do companies have any obligation to try and avoid disclosure of personal information or contain a breach by reasoning with or conceding to the demands of breach perpetrators?

While few would characterize the Ashley Madison site as vital infrastructure, or perhaps even view the significance of their operations as comparable to companies like Home Depot, eBay, Target, Sony or many of the other recent high profile breach targets, it is difficult to deny that the impact of the breach is significant. Notwithstanding the potentially questionable social utility of Ashley Madison, the reality is that data pertaining to one's sexual infidelity and proclivities (whether actual or merely ambitious) is highly sensitive information, and the disclosure of such information certainly has the potential to create severe personal (and potentially financial) consequences for many people.

From a business impact perspective, it will be valuable to observe the progression of Ashley Madison's post-breach operations, both in terms of their navigation through numerous legal challenges, and in terms of their ability to attract and retain users in order to operate as a going concern. This is particularly true in the present case, because Ashley Madison's service model is fundamentally premised and reliant on preventing exactly the type of breach that ultimately occurred. In other words, it will be interesting to see if a website that explicitly offers secrecy to users can survive after users are publicly exposed.

While it may be tempting to discount the significance of the Ashley Madison breach based upon the nature of the site itself, doing so overlooks the broader issues of online security and consumer confidence in web-based transactions. Ashley Madison's attempt to weather the fallout of this summer's data breach, successful or not, is likely to be instructive for all businesses, even those with more traditional service offerings.

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2015

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Lyndsay A. Wasser
Rohan Hill
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.