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Tuesday, September 17, 2019

Expect more data breach litigation in 2016

By Greg Travis | Jan 22, 2016


PROVIDENCE, R.I. (Legal Newsline) – According to various reports, incidences of data breaches and their corresponding litigation are rising by 25 to 30 percent every year.

High-profile lawsuits involving companies such as Target, eBay and Home Depot have drawn attention to the issue. One Rhode Island attorney says the lawsuits will keep coming this year as plaintiffs lawyers try out new theories of liability.

Linn F. Freedman, chairperson of the Data, Privacy & Security Team at Robinson & Cole, recently told Legal News Line, “In the past year, we have seen an increase in class action data breach litigation, and I do not see the trend going the other way”.

Over the past few years, victims of cyber attacks have included major corporations, universities, health organizations, and government agencies. But according to a 2015 report from the legal firm Bryan Cave, the major target of the plaintiffs bar has been the retail industry.

It states that “while only 14.5% of publicly reported breaches related to the retail industry, nearly 80% of class actions targeted retailers”.

However, any entity that involves the use of credit or debit cards is susceptible to hackers. Breaches at restaurants, hotels, and bars also occur. CSID, an ID protection firm says that the business sector accounted for nearly 40 percent of all breaches in 2015.

So far, plaintiffs have had little success in these types of suits. In last year’s eBay decision, for example, a federal judge in Louisiana dismissed the plaintiff’s case on the grounds that the compromised personal information was not used to injure him.

 But changes are in the works, and according to legal professionals it will only be a matter of time before plaintiffs attorneys discover more successful avenues of recovery.

A 2015 study by the Ponemon Institute reports that, “Recent filings have sought to broaden plaintiffs’ arsenal of weapons to include actions such as negligent misrepresentation and apply products liability theories of breach of warranty and strict liability," and other measures that would “significantly increase the cost of data breach litigation and data breach insurance coverage” for defendants in breach actions.

"We are seeing plaintiffs attorneys starting to use state law causes of action more and more in an attempt to find other causes of action that may be recoverable when most data breach cases are getting dismissed for lack of standing due to the inability to show injury or harm," Freedman said.

"I anticipate that this will continue throughout 2016”.

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