The current global economic climate has led to a growing number of bankruptcy and insolvency proceedings, particularly in the U.S. In dealing with these proceedings, many business leaders have not paid enough attention to the role of privacy law and its impact on the bottom line.
Of course, Canadian companies are subject to Canadian privacy laws such as PIPEDA, which require the consent of individuals for the disclosure of personal information to third parties. In structuring privacy policies, Canadian companies should consider all outcomes including bankruptcy. As a result, privacy policies should be carefully drafted with consideration of the possibility that personal information may be shared with third parties in the event of bankruptcy. Doing so will almost certainly not be enough to fully comply with Canadian legal requirements, but it’s a prudent step in the right direction – especially in these uncertain economic times.