Canada: From Bricks And Mortar To Data And Privacy

Last Updated: August 22 2017
Article by Avi Sharabi

The litigation landscape is shifting in Canada, and a new breed of litigation claims is emerging –   the data/privacy claim.

Data breaches, privacy breaches, and technology errors and omissions are some of the new types of loss being claimed by plaintiffs. One of the problems for insurers and potential defendants is figuring out from where these claims can arise. Two recent decisions of the Supreme Court of Canada illustrate this uncertainty.

Privacy Rights labelled as “Quasi-Constitutional”

In Douez v. Facebook (released on June 23, 2017), the Supreme Court of Canada allowed a class action against Facebook to proceed in British Columbia, despite a jurisdictional clause contained in Facebook’s terms and conditions.

The proceeding arose out of Facebook’s “Sponsored Stories” campaign in 2011. “Sponsored Stories” was a marketing initiative whereby Facebook would include the name and photograph of a Facebook user to advertise goods and services to other Facebook users. The plaintiff alleged that Facebook used her name and likeness without consent, and violated her privacy, in contravention of British Columbia’s Privacy Act. Facebook challenged the lawsuit, on the basis of jurisdiction.

Facebook’s terms and conditions contain a forum-selection clause, which mandates that all proceedings against Facebook be brought in California. In order to become a user of Facebook, one has to accept its terms and conditions. Facebook argued that bringing the class action in British Columbia ran afoul of its terms and conditions.

The Supreme Court rejected Facebook’s argument, ruling in favour of the plaintiff. There were several factors that contributed to the Court’s decision including the following:  that privacy rights are “quasi-constitutional”. While the right to privacy is not expressly stated in Canada’s Constitution, characterizing privacy rights as quasi-constitutional signaled the Court’s belief that Canadian governments have an obligation to protect its citizens’ privacy.

Furthermore, the Court took into account that Facebook’s terms and conditions constitute a contract of adhesion - a take-it-or-leave-it contract, where a user or customer, who usually has much less bargaining power than the entity offering the contract, is forced to choose between accepting the terms and conditions or rejecting the goods or services. As the jurisdictional clause at issue was not negotiated, and the plaintiff had essentially no bargaining power, the Court ruled that the terms and conditions should not abrogate Canadian law.

The Supreme Court exercises Global Jurisdiction

In Google Inc. v. Equustek Solutions Inc. (released on June 28, 2017), the Supreme Court of Canada allowed a global interim injunction against Google despite the fact that Google was not a party to the action.

The action arose out of a dispute concerning intellectual property.  The defendants (the plaintiffs' former distributors) allegedly unlawfully appropriated the plaintiffs’ trade secrets. They also allegedly designed and sold counterfeit versions of the plaintiffs' products (i.e. networking devices). The plaintiffs requested that Google de-list or de-index the defendants from its search engine. Google refused to do so.

The plaintiffs sought an interim injunction (i.e. until there is a final judgment in the proceeding) against Google, requiring it to de-list the defendants. Injunctions are rarely granted by Canadian courts, as the bar for granting one is high.  In this instance, however, given the global reach of Google’s search engine, the Supreme Court imposed a worldwide interim injunction.

Implications for Future Claims

Data breaches and other similar technology-related claims often result in privacy claims being made by those alleged to be affected. Depending on the jurisdiction, Canadian claimants have certain statutory and common-law remedies for violations of their privacy. As the Facebook case demonstrates, the highest court in Canada has ruled that privacy rights are nearly on par with Canadian Charter (i.e. constitutional) rights such as the right to life, liberty and security of the person (section 7 of the Charter of Rights and Freedoms). Affording privacy rights this elevated status means that one is more likely to see results similar to the Facebook case, where a global technology company, which had arguably contracted out of litigation in Canada, was forced to litigate in Canada.

So, what if a company is relatively smaller than Facebook, but still has extra-territorial reach? What if that company never anticipated litigating anything in Canada and, therefore, never thought to protect itself with insurance that applies to Canadian claims?  Alternatively, what if an insurer had issued a technology errors and omissions policy to Facebook with global coverage, anticipating that all claims against it would eventually end up in California? It is not hard to imagine an underwriter issuing a liability policy (whether it is a cyber liability, technology liability, or some other type of liability policy) to an insured, on the assumption that any claim outside of California would be struck due to a forum-selection clause in its terms and conditions. After all, this type of clause is common to many websites and applications. What’s more, a website’s terms and conditions will almost always be a contract of adhesion - a product created by parties of unequal bargaining power. If privacy rights override this contractual language, then claims could arise from a vast number of jurisdictions.  

The Google case demonstrates that Canadian courts are willing to grant orders against global technology companies that potentially reach beyond Canada’s borders. Of course, that doesn’t mean that courts in other jurisdictions will enforce those orders, but Canada is a respected legal jurisdiction, so one would expect many common-law jurisdictions to follow suit.

The Google case alone could realistically create a logistical nightmare for insurers. Even if Google has not made a claim for coverage (as there is arguably no claim against it), its insurers may be monitoring this matter for potential future claims. This would likely also require retaining legal counsel in the various jurisdictions in which the plaintiffs may seek enforcement of that injunction.

The reality of the global economy is that claims can come from anywhere in the world – or at least anywhere a company’s website or application reaches.

Privacy and related laws are not uniform, which means that not only can claims come from anywhere and everywhere, but there will, likely, be different rulings depending on the jurisdiction.

Insurers must therefore take this into account when assessing the risk of doing business in any given jurisdiction. Moreover, insurers who issue liability policies to those companies must ensure that they have assessed those risks, and have considered the full extent of the risks of liability claims impacting the policies they issue.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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.

Avi Sharabi
In association with
Related Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions