Could You Face Litigation Due to a Data Breach?
More business than ever is being conducted online, and this trend is only likely to increase as technology moves ever forward. This means that consumers, whether individual or corporate, are willing to give certain information to an online organisation in return for goods or services. However, when such information is delivered and stored by a commercial entity, it can be considered confidential or proprietary, and this can carry a significant risk for the company involved. Consequently, if you are just entering this arena, could you be open to litigation if you fail to manage your data correctly?
High-Profile
As you may know, there have been many high-profile cases in the United States and Europe that involve the mishandling of private data by large companies. This has led to more stringent regulations in some places, and companies are now liable for substantial fines if they are found to be noncompliant. These laws are not as prevalent in Australia, but this situation is likely to change and, in fact, new laws relating to data breach notification have recently come into effect in Australia as well.
Changing Laws
In some places, any person who suffers damage due to a data breach can automatically sue the holder of the information. While this may be a developing issue in Australia, there may still be grounds for an individual to stake a claim against an organisation in the worst-case scenario.
Negligence and Confidence
For example, it may not be enough for a company to simply notify a consumer if their data was breached in any way and personal information was disclosed to a third party. Consumers would be rightly aggrieved in this situation and may be able to look for a way to claim against the company for loss and damage. They could claim that the company was negligent or that they had breached their confidence in the normal course of business, and this may be a basis for litigation against the organisation.
Adequate Planning
Every company that receives or may store information related to a third party for the purpose of doing their business should look very carefully at their methodology. They should only use the safest and most secure software or strategies and should have an emergency plan in place to deal with any particular breach. They should also be prepared to handle any litigation that may develop and should reach out to a lawyer in this field just in case.
For more information about similar situations, call a litigation lawyer.
