Federal Court's data breach decision shows new tilt toward victims, class-action lawsuits

Monday, August 3, 2015

Federal Court’s data breach decision shows new tilt toward victims, class-action lawsuits

John Fontana writes at ZDNet:

In an interesting twist, the Court said the fact Neiman Marcus offered free credit monitoring services was evidence that there was harm to these victims. The ruling turned on its head the way courts historically view such services as compensation for harm while negating a victim's right to file a lawsuit (re: standing).

This may get very interesting very fast: if companies are at risk of being held ot have tacitly admitted liability by offering credit protection services to potential breach victims, they will stop offering that stuff.

The possibility of class actions instead of free credit monitoring may appeal to those whose data has been stolen, but it’s not really a great trade at all. Credit monitoring is expensive and the industry is still suffering growing pains, but class actions usually net plaintiffs an insignificant amount of money in damages while making lawyers very, very rich.

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