Predicted surge in data privacy litigation claims
. In this article we consider the potential implications for insurers.
The case
The case considered an Austrian citizen who sued the country’s postal service for processing their data without their consent. The Claimant sought reparations for ‘non-material damage’ under GDPR’s liability regime, alleging that they had been caused substantial distress. In its defence the postal service asserted that the Claimant data subject had not suffered sufficient damage.
The national court was unsure as to the extent to which compensation rights for non-material damages apply under GDPR’s Article 82, so it referred the case to the ECJ.
ECJ decision
The ECJ ruled that:
‘Not every infringement of the GDPR gives rise, in itself, to a right of compensation’.
However, there is no requirement for non-material damage to reach a certain threshold of seriousness to confer a right to compensation. As such, data subjects seeking compensation for GDPR breaches can do so without proving that a specific threshold for the seriousness of the harm is met. It is then for national courts to decide on the appropriate level of damages.
Considerations for insurers
Despite the claimant still having to prove a GDPR violation and a causal link between the violation and the harm, this decision could result in an increase in data privacy claims against businesses.
However, this case must be balanced against the case of Lloyd v Google, in which the Supreme Court held that a mere loss of control over data does not automatically result in compensation. Indeed, the ruling of the ECJ is not binding on English courts following Brexit. Nevertheless, the decision could still be persuasive and influential in judges’ decision making in the UK. As such, insurers and underwriters should consider the scope of coverage they offer to policy holders, particularly under management liability, professional indemnity and cyber wordings, where cover for data privacy claims is often provided.
Additionally, insurers may also wish to consider incorporating tighter conditions into their wordings in relation to GDPR compliance.
Contents
You may be interested in...
You may be interested in...
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Navigating workplace sexual harassment laws during the festive season
Opinion
Revolutionising the Workforce: Impact of Get Britain Working White Paper
°ÄÃÅÁùºÏ²Ê×ÊÁÏ - London Market Quarterly
London Market Quarterly December 2024: An eye on what the market needs to know
Published Article
Johnson et al v FirstRand Bank: Judgment sends warning across financial services intermediation
Opinion
Balancing employer flexibility and employee rights
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
The ‘grate’ cheese robbery: Implications for insurance professionals
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Environmental crime and the impact for insurers
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Carbon fraud prompts insurance response
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
What might a Trump victory mean for the UK insurance industry?
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Post Office scandal: Lessons for underwriters
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Weather protection parametric insurance: A sign of things to come?
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Building an inclusive workplace: strategies for attracting and retaining disabled talent
On-Demand
Kinship care: DJ v Barnsley Metropolitan Borough Council and SG
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
After a pause, Buy Now Pay Later (BNPL) regulation becomes one step closer
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Updates to the UK’s Arbitration Bill
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Ozempic: The rising costs and coverage issues of weight loss medication
°ÄÃÅÁùºÏ²Ê×ÊÁÏ - Employment Rights Bill
What does the Employment Rights Bill mean for employment practices liability insurance?
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
ICAEW: Changes to PII requirements
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Contractor insolvency: Peabody Trust v NHBC
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Insurability by design: Increased transparency for vehicle manufacturers and insurers
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
By a narrow 2 to 1 majority, the Court of Appeal finds in favour of insurers in the construction of an exclusion clause in a W&I policy
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Organisational approaches to ESG and sustainability matters
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
LMA binders’ consultation
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Smooth sailing ahead: The LMA's new Open Form Default Clause
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
PFAS: The issue that won’t go away
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Oklahoma earthquake: Racial discrimination in adjudication
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Will the Online Safety Act help reduce Google ad spoofing in insurance?
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Vicarious liability for kinship foster carer abuse: Implications for local authority insurers
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Latest short-term insurance trends
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Motor finance complaints on hold: Why now is the time for strategic action
Published Article
General insurance claims part 3: evidence of the insurance markets’ learnings from the consumer duty
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Artificial intelligence putting the ‘actuarial defence’ to the test?
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Under the influence: France introduces insurance requirement for influencers
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Insuring a summer of sport
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
The impact of UK riots on insurers
°ÄÃÅÁùºÏ²Ê×ÊÁÏ - The Word
The Word, August 2024
°ÄÃÅÁùºÏ²Ê×ÊÁÏ
Product Safety and Metrology Bill: E-bike and e-scooter fires
Opinion
Choose your words wisely: Balancing inclusivity and employees’ beliefs at work
Published Article - Consumer Duty
General insurance claims: The consumer duty’s easy target? (part 2: ‘a history of warnings’)
