Last month, as part of some research for an article, I focussed on CASL’s provision that governs business referrals to make sure I accurately represented the legislation and its regulations.

When someone makes a referral to another, the rules governing such referrals are found in provision 4.1. of Industry Canada’s Electronic Commerce Protection Regulations (ECPR).

Provision 4.1. reads:

Paragraph 6(1)(a) of the Act does not apply to the first commercial electronic message that is sent by a person for the purpose of contacting the individual to whom the message is sent following a referral by any individual who has an existing business relationship, an existing non-business relationship, a family relationship or a personal relationship with the person who sends the message as well as any of those relationships with the individual to whom the message is sent and that discloses the full name of the individual or individuals who made the referral and states that the message is sent as a result of the referral.

Essentially, provision 4.1. states that a referral is permitted when someone has one of the following relationships with one person (the referred) and one of the following relationships with a second person (the referred to): an “existing business relationship”, an “existing non-business relationship”, a “family relationship”, or a “personal relationship.”

What’s been omitted from this list of relationships—whether purposefully or accidentally—is that if someone has express consent with someone else (either the person being referred or the person being referred to), but doesn’t also posses one of the foregoing relationships with that same person, they may not make the referral between the two parties.

This seems innocuous enough but let’s break it down and use some examples to examine both the logic and the harm that comes with this deliberate or inattentive omission. For the sake of the examples, let’s presume that the relationship listed in each preceding example is the only relationship between the two parties—this’ll save me from writing something like “no other relationship exists” in each example.

Okay, let’s begin with the first example:

Person B (the referred party) bought a service from Person A (the referrer) one year ago, and Person A has a personal relationship with Person C (the party referred to). According to provision 4.1, Person A may refer Person B to Person C because Person A has an existing business relationship (i.e., two-year existing business relationship rule) with Person B and a personal relationship with Person C. Okay, that’s logical.

Let’s use a second example:

Person B (the referred party) inquired about a service with Person A (the referrer) two months ago, and Person C (the party referred to) inquired about a service with Person A five months ago. According to provision 4.1, Person A may refer Person B to Person C because Person A has an existing business relationship (according to the six-month existing business relationship rule) with both Person B and Person C. Okay, that’s logical too.

Let’s use a final example to illustrate where the provision logically breaks down:

Person B (the referred party) purchased a product from Person A (the referrer) three years ago and, in the process, provided Person A with express consent, and Person C is the son of Person A (therefore, a family relationship exists between Person C and Person A). Person B asks Person A for a referral to Person C (Person A’s son). Despite the fact that Person B is a past customer of Person A and has even provided express consent to Person A, no where in CASL, including provision 4.1. of the ECPR, does it permit Person A to make this referral to Person C who is his own son.

Fundamentally, CASL is flawed.

Lawyers such as Stephanie Provato and Dr. Emir Crowne (in their 2014 paper), and Barry Sookman (on a number of occasions) contend that CASL is unconstitutional; Harrison Pensa LLP partner David Canton, at a 2016 London Chamber of Commerce event, called it “ill-conceived, badly drafted, hard-to-understand”; and the Canadian Chamber of Commerce has published a 2015 policy paper requesting the federal government to reform the legislation (side note – I served on the London Chamber Government Affairs Committee taskforce that wrote the first draft of this policy paper, which subsequently passed at the 2015 Canadian Chamber AGM).

Including “express consent” in the list of relationships under provision 4.1. won’t solve the fundamental problems with the electronic messaging provisions of CASL. In the past, I’ve written about three simple changes that would. However, adding ‘express consent’ to provision 4.1. would at least resolve the conspicuous omission noted above.