How Do Privacy And Data Breach Lawsuits Affect Your Business?

Law Blog

Personal injury is often thought of as small cases, such as automobile accidents or workers compensation claims. When you think about high-stakes personal injury, you envision medical malpractice or product failures. What you probably don't think about are privacy lawsuits and their impact on your business.

Data Privacy Lawsuits Growing

Privacy issues are a growing problem as more and more data becomes digital. With high-profile breaches of large companies resulting in the loss of personal data for millions of customers, the potential for personal injury from those data breaches is growing. Courts have been disinclined to support the idea of personal injury resulting from data breaches. In one recent ruling, a New York state judge ruled that a data breach cannot result in a personal injury between the injured party and the company who lost the information because the actual cause of the injury was a third party hacker.

The main reason that New York case ruled against a personal injury claim was that personal injury only applies to a purposeful act by the company in disseminating personal data. Since a hacker stealing information is not purposeful, there was no intentional injury caused.

Just the fact that lawsuits have been filed concerning data breaches, privacy, and personal injury means that businesses need to be aware of the threat to their time and resources. Class action lawsuits have been filed in a number of the large data breaches, such as Global Payments, Inc., Yahoo! Inc., and Zappos surrounding those companies' failure to properly protect customers' personal information.

How to Address this Issue as a Company

The one sure thing not to do is to do nothing. Data breaches are costly to both companies and consumers. If you own a business, are in charge of risk management within a business, or are in a position to influence data protection policy, then here are some good steps to take:

  • Purchase insurance – There are numerous insurers available now who compete for your business. With the heightened awareness around data breaches, more insurers are getting into the act to provide coverage.
  • Document and test your data security – Just because you apply for insurance does not mean you will be covered. While more insurers are in the market, they are also more stringent in reviewing data protection standards to assess risk and coverage. Also document and continually update your procedures for handling and providing access to online, personal information.
  • Educate your legal department – Your legal department needs to be aware of any changes to your data security policies to better craft contracts to protect you.

As yet, there has been a general reluctance to award personal injury in data breaches. The problem comes down to actual publication of the information. Without proof that the data was publicized, no personal injury can occur. However, it is best to be protected since, as the problem with data breaches become more prevalent, the number of cases filed and heard could change the nature of these cases and the rulings of the court. For more information about these types of lawsuits, contact a firm such as Sweetser Law Office.


13 April 2015

injured at work? what do you do now?

Were you injured at work and fighting to get the workers compensation that you have paid into each year? Sometimes, getting those payments can be very difficult. What do you do when an employer fights the claim? Do you need a lawyer to help you through the process? How will you pay for a lawyer if you cannot even pay your electric bill? You are probably as lost as I was when I went through the process. Fortunately, you can learn from my experience with the system and find the answers to many of the questions that you have about filing a workers comp claim and fighting the system when it is denied.