Can I sue a company involved in a data breach?

Many conduct business online, sharing personal and financial information in cyberspace without considering the potential impact. They enjoy the convenience or feel that they don’t have another option. Unfortunately, data breaches often serve as a precursor to identity theft, where malicious attackers exploit business or customer information to commit fraud. No matter how many passwords are changed, this information is now out there for sale on the dark web or for the thieves to exploit themselves.

The grounds for a lawsuit

Business partners or customers can potentially sue a company involved in a data breach. However, the ability to sue and the potential outcomes largely depend on the nature of your pre-existing legal relationship with the company that sustained the security breach. Here are some key points to consider:

• Business contract: If you have a business contract with the company, you should review the terms of your agreement to determine if remedies are specified when there is a breach.
• State laws: Like other states, California has laws punishing companies that fail to disclose data breaches that affect their individual and business customers in a timely manner.
• Financial or psychological damage: You could sue for any financial or psychological damage caused by a data breach. However, the data breach would need to involve your personal data and be caused by the wrongful conduct of an organization in control of protecting your data².
• Leak of personal information: Individuals may sue businesses for damages resulting from the leak of personal information, including medical records, bank accounts, and tax returns³.

It’s important to note that this is a complex area of law, and the specifics can vary greatly depending on the circumstances.

Next steps

Those who think they have legal recourse can seek legal advice from an experienced data privacy lawyer here in California. They can explain how cybersecurity contracts and the state’s privacy laws work. They can also tailor their professional advice to fit your circumstances.