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  • Jamie Hari

Death by 1000 Court Papers

One of the biggest unintended consequences of a data breach might be congestion of the legal system. A victim of the 2017 Equifax data breach has sued, and won, in a Vermont small claims court. The financial victory was small for the plaintiff, but signalled the potential for a flurry of similar court filings in years to come.

Disorder in the Court

It's common for a single data breach to involve the compromised records of hundreds or thousands of victims. In the case of the Equifax breach, however, as many as 150 million people were affected. If even 1% of those were to sue in small claims court, it could have a disastrous effect on the already backlogged justice system. 

This is considering just a single breach. It simply wouldn't be possible handle the volume if the standard practice for every data breach became for individuals to sue. As a result of this looming issue, we could soon see interesting new legislation which aims to keep such settlements out of the courts. For example, legislators may impose limits on penalties or mandate that companies provide post-breach services to victims.

Everyone Will Have Their Day in Court

The other likely outcome of such a shift in data breach response is the amount of litigation to which companies become exposed. Even a small breach could mean a string of court dates lasting months and costing a great deal in legal fees and settlements.

Large and particularly-susceptible organizations are already subscribing to cyber insurance coverage to help with the potential legal costs, but even so, the damage to brand and the interruption to business operations caused by numerous lawsuits could be difficult for many organizations to navigate.