What Counts as 'Harm' in a Data Breach Lawsuit?
Trying to understand what counts as “harm” in a data breach lawsuit can trip up victims considering legal action. You cannot recover compensation without proving that you have been harmed by the breach.
If you’re unsure whether the harm you suffered is enough to file a lawsuit for compensation, talking to an attorney through Class Action U can help. A skilled data breach attorney can help you navigate what to do if your personal data has been compromised, including thoroughly assessing your case to determine the damages you sustained and whether you may have a case for a class action or individual lawsuit.
What Is Considered Harm in a Data Breach Lawsuit?
Data theft can cause several types of harm, including:
- Economic Harm: Measurable impacts such as direct financial losses from fraud, unauthorized charges, and costs related to credit monitoring or identity theft protection services. Depending on your case, economic harm can also include loss of earnings or business opportunities.
- Non-Economic Harm: Non-financial impacts such as emotional distress, anxiety, and mental health conditions such as post-traumatic stress disorder, are often exacerbated by future risks of identity theft. Non-economic harm can also include reputational damage, such as loss of trust, or harm to public image, which can affect personal and professional relationships.
- Statutory Harm: In some jurisdictions, having your data exposed is known as statutory harm. In these places, just having your data exposed is enough to count as harm under the law, and it gives victims the right to take legal action even if they haven’t experienced financial loss or emotional distress yet.
Financial losses, emotional distress, reputational damage, and future risk of identity theft are some of the most common forms of harm in data breach claims. Victims also struggle psychologically due to the ongoing stress from the fear of identity theft and the uncertainty of what might happen in the future.
If you and many others suffered the same type of harm, you may be able to join an existing class or help start a new class action suit.
Financial Losses
It’s common for data breach victims to experience direct financial losses due to fraud, theft, or unauthorized transactions. These types of financial losses count as harm in a data breach lawsuit that are measurable and simpler to calculate.
Financial damages can include out-of-pocket expenses for replacing stolen funds, fees for recovering stolen identities, and expenses related to credit monitoring or identity theft protection. These costs are relatively simple to quantify to determine the full extent of financial harm.
Exposure of sensitive information can also result in loss of business or employment opportunities, depending on the stolen data. Damage to your business or career can also be considered a form of financial harm. A skilled attorney can help you determine whether you can claim harm to your business or employment opportunities based on the individual circumstances of your case.
Emotional Distress
Everyone experiences some sense of fear after discovering their data has been stolen. However, you are more likely to recover compensation for emotional distress if the mental health effects are long-term and have resulted in a clinical diagnosis.
Victims of data breaches may suffer chronic anxiety, stress, depression, or paranoia caused by the theft of their data. In more severe cases, some victims experience PTSD.
In some jurisdictions, the financial value of emotional distress damages can be calculated using expert testimony, medical records, psychological evaluations, and other evidence demonstrating lasting emotional harm. Talk to a knowledgeable lawyer to see whether the emotional harms you’ve suffered justify filing a legal claim.
Reputational Damage
Depending on the nature of the data exposed, reputational damage can count as harm in a data breach suit. Embarrassing or stigmatized personal data can lead to public humiliation for breach victims. Defamation can also occur if the leaked data leads to bad actors maliciously making false claims about you.
Reputational damage can be hard to quantify because it relies on assessing future financial losses based on damage to your reputation. In some cases, this may also include calculating future financial losses due to a loss of trust with companies or entities you did business with. Though harder to quantify, these losses may be considered in terms of long-term emotional and financial damage.
A seasoned attorney can help you consider all of your financial losses, including any emotional or reputational damage, before filing a suit.
Future Risks
Exposed personal data places victims at future risk of identity theft or financial fraud. In some cases, courts may determine the financial value of the future risks based on expert testimony and statistical data about the likelihood of harm caused by the data breach.
Constant fear of future harm can also cause ongoing psychological distress, which can lead to damages for emotional distress. Fear of future harm can also be estimated with expert testimony and medical information that sheds light on the impact fear can have on your life.
Proving Harm in Data Breach Lawsuits
A critical step in the lawsuit process for data breach cases involves demonstrating the harm you suffered. Plaintiffs in data breach cases carry the burden of proof, which means it’s their responsibility to prove harm existed.
Proving harm in a lawsuit requires evidence. To show you were affected by a data breach, evidence can include statements of financial loss, fraud and credit reports, medical records of emotional distress, documentation of impact to your reputation, and expert testimony.
If you’re a named plaintiff in a class action lawsuit, the evidence provided must also include proof that the harms identified are representative of the harms suffered by other class members. A well-versed attorney will help you collect this evidence to build a strong case for you and potential class members.
Can Companies Argue No Harm Was Done?
It’s common for companies that handled victims’ data negligently to argue that no harm was done after a breach. A company may claim that the breach did not result in any direct financial loss or that no personal data was actually exposed or misused. Company legal teams may also insist that affected individuals did not experience any measurable emotional distress or reputational damage.
Such arguments almost always happen when filing a claim against a company. A seasoned data breach lawyer will have the knowledge and experience to fight these claims effectively and pursue justice on your behalf.
How Much Compensation Can a Data Breach Be Worth?
The amount you can sue a company for in a data breach case may vary depending on your jurisdiction and whether your claim is handled as an individual or a class action lawsuit.
Examples of settlements from recent major data breach lawsuits include:
- $575 million from Equifax for a breach of customers’ personal and financial information in 2019
- $350 million from T-Mobile for a breach that led to the sale of customer information by cybercriminals in 2022
- $190 million from Capital One for a breach affecting 100 million customers in 2021
Your personal data breach claim will be resolved in one of two ways, based on the specific damages you suffered or through a class action process. In the class action process, a claims administrator assigns set compensation amounts for certain types of harm. A trusted lawyer can help you better understand how much your claim may be worth.
Are Data Breach Settlements Taxable?
Payouts from class action suits, including data breach suits, are generally non-taxable. However, a few types of damages are subject to taxation.
Lost wages, punitive damages, and non-economic damages unrelated to an injury can all be taxable. Talk to your attorney about whether your settlement is likely to be taxed.
Factors Affecting Compensation in a Data Breach Lawsuit
Compensation in a data breach lawsuit varies depending on several key factors. Victims can receive different amounts in damages based on the severity of the breach, the actual harm sustained, the company’s negligence, and state laws surrounding data breach claims.
Severity of the Breach
The scale and nature of the breach you suffered will influence the damages. A breach involving sensitive data such as Social Security numbers or medical records may lead to higher compensation for victims.
Actual Harm Suffered
If you can demonstrate that you suffered significant financial or emotional harm, such as having a bank account emptied or developing PTSD, you may be entitled to higher compensation.
Company's Negligence
If the company’s actions were particularly negligent, such as failing to secure data or responding inadequately to the breach, damages may be increased to reflect its carelessness.
State Laws
Some states have specific laws that may limit the damages a victim can claim or provide guidelines for compensation in a data breach case. The amount you can sue for in a data breach case may vary depending on the jurisdiction and whether you file an individual or class action lawsuit. It’s important to work with a skilled attorney who understands relevant state laws and can effectively advocate on your behalf.
Why a Data Breach Lawyer Is Important for Maximizing Compensation
Navigating a lawsuit after having data stolen is a complex process. Having a lawyer on your side with experience handling data breach claims can have a significant impact on the outcome of your case.
In-Depth Knowledge of Data Breach Laws
Data breach lawyers have specialized knowledge of the laws surrounding data breaches, including federal and state regulations, and can effectively navigate the complexities of the legal system. Your lawyer will be familiar with previous data breach cases and settlements, which allows them to strategize based on established legal precedents and maximize potential compensation.
Ability To Prove Harm and Losses
An experienced lawyer can help identify and calculate your tangible harms, such as financial loss or identity theft, and intangible harms, such as emotional distress or reputational damage. Your attorney will work with you to gather relevant evidence, such as financial records or medical reports, to support your data breach claim.
Negotiating With Insurance Companies
A skilled data breach lawyer can negotiate with the company responsible for the breach or their insurers to pursue a fair settlement. Work with a data breach attorney to ensure you protect your rights and give yourself the best chance to recover compensation for your damages and other losses. A trusted data breach attorney will handle complex settlement discussions on your behalf, ensure you’re not pressured into accepting a lowball offer, and leverage legal tactics to push for maximum compensation.
Representation in Court if Necessary
The possibility of having to appear in court increases stress and anxiety for many data breach victims. However, many data breach cases settle out of court, meaning the claim never goes to trial.
If your case goes to court, a dedicated attorney can provide staunch representation and make a strong case to the judge to prove the harm you suffered.
Speak to a Data Breach Lawyer
At Class Action U, we are deeply committed to supporting victims of data breaches in seeking the compensation they deserve. We connect you with lawyers who are experienced in pursuing justice on your behalf.
If your data was stolen or exposed due to a company’s negligence, don’t wait. Reach out online today to schedule your free legal consultation.
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