Another week, another international news story about a
significant personal information security breach. Or so it seems.
Last month John Legere of US-based T-Mobile and Dido Harding of
UK-based TalkTalk added their names to the already lengthy list of
company heads who have announced that the confidentiality that once
attached to stored personal information had been compromised. This
on the heels of other similar prominent disclosures regarding
Ashley Madison, JP Morgan, Sony, Home Depot and, of course, the
aptly named Target. As the list of the hacked grows ever longer,
segments of the public appear to have concluded that organizations
(including government agencies) are too complacent to implement the
additional policies, procedures and technologies required to
enhance the protections afforded to personal information collected
from customers and employees. On this bleak view there is a stark
choice, to either continue to provide personal information to
employers and businesses with the knowledge that it is likely a
question of when, not if, that information will become more broadly
accessible, or to opt out of participating in the channels most
likely to give rise to such requests for disclosure of personal
information, despite the increased efficiencies and other benefits
that generally arise from such participation.
There are, however, good reasons to believe that here in Canada
we have reached the point where many senior decision makers have
been convinced of the need to make investments in order to shore up
the defences to intrusion being put forward by their organizations,
rather than continue on in the hope that criminals will
fortuitously select a neighboring enterprise. It has been clear for
some time that the largest Canadian financial services providers
have been actively implementing "best practices" based
responses to information security threats, which could explain the
relatively good performance to date of that sector in the
information security breach area. Even the recently departed
federal Conservative government, which was never closely associated
with a meaningful concern for civilian privacy interests (as a
largely political exercise it promulgated limited and exception
riddled anti-spam legislation), had a late-term interest in being
seen as championing a strengthening of the federal privacy
legislation "PIPEDA" to, among other things, include
mandatory breach notification requirements along with meaningful
fines for non-compliance (up to $100,000 per offence). Likewise,
insurers are reporting increased demand for cybersecurity policies
despite the relatively high deductibles involved, risk transference
being an aspect of overall risk management programs.
If we have indeed finally reached a tipping point, much of the
credit will have to be given to an activist Canadian judiciary for
"upping the ante" on privacy rights protection issues.
Several Canadian class actions involving allegations of breach of
privacy rights have been certified and, in a notable 2012 decision
in the case of Jones v. Tsige1, the Ontario
Court of Appeal created a new common law cause of action for breach
of privacy in Ontario. The tort of intrusion upon seclusion may
also apply in Alberta, Nova Scotia, New Brunswick and Prince Edward
Island. Liability in the context of the tort of intrusion upon
seclusion has fallen in the general range of $10,000 to $20,000,
depending on the egregiousness of the facts in each particular
case. When this damages range is multiplied by the number of
individual plaintiffs in a class action, the overall potential
monetary exposure may of course be very significant.
A similar dynamic is taking place under PIPEDA. Via section 16
of PIPEDA, courts may award damages, including damages for
humiliation that the complainant has suffered, arising from a
breach of the legislation. In the past 3 years there has been an
evolution towards courts awarding increasing damages amounts under
s.16. In the recent case of Chitrakar v. Bell TV,
involving a non-consensual credit check, the Federal Court awarded
the applicant $10,000 in damages, $10,000 in exemplary damages,
plus $1,000 in costs. The court acknowledged the difficulty of
assessing damages absent evidence of direct loss, but in a marked
departure went on to say "there is no reason to require that
the violation be egregious before damages will be
So while there continue to be many discouraging aspects to the
current situation regarding the protection of personal information
globally – there is a notable need for higher encryption
"cloud" services with desirable usability features
– here in Canada a degree of cautious optimism is now
1. 2012 ONCA 32 (CanLII)
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Earlier this year, a Canadian trial court ruled that Canada's Personal Information Protection and Electronic Documents Act ("PIPEDA") has extra-territorial application and restricts the dissemination of personal information of Canadians ..
While much has been written about the impending CASL private rights of action, less has been said about the new private right of action CASL will tack on to the Competition Act for misrepresentations in electronic messages.
Potential damages of up to $1 million per day may be imposed. I refer to the blog by Aaron Baer "Are You Compliant With Canada's Anti-Spam Law? If Not, Expect Lawsuits Starting on July 1 of This Year."
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