SolutionsHire top legal talent for any scope of workGet Started Contact us to find the best fit for any in-house or law firm role Testimonials Trusted by the world's leading legal departments FAQ Frequently asked questions about working with Legal.ioEmployer Resources Tools and guides for hiring managers One of the key factors contributing to the surge is the increased sophistication of cybercriminal activities.
In 2023, there has been a notable increase in data breach class actions, as reported by Law.com Radar. The report indicates that the number of cases tracked up to the end of June was 246, which is roughly equivalent to the total number of cases for the entire year of 2022. The monthly average of data breach class actions for 2023 stood at 44.5 until the end of August, marking a significant rise from the 2022 average of 20.6.
The surge in data breach class actions can be traced back to several contributing factors. One of the primary catalysts for this increase is the MOVEit data breach that took place this year. Furthermore, there has been a marked increase in the sophistication of cybercriminal activities, leading to more frequent and severe data breaches.
“We are seeing a lot of ransomware attacks, where criminals are demanding a payment in exchange for not publishing data that they were able to exfiltrate,” said Amy Keller, of Chicago’s DiCello Levitt, who has acted against T-Mobile and Marriott. “But everyone knows that paying off a criminal doesn’t guarantee that they will delete the data. If anything, it only encourages the attacks to continue.”
The Dichotomy Between Data Breach Class Actions and Consumer Lawsuits
While data breach class actions are experiencing an upward trend, consumer lawsuits have reached an all-time low. Over 11,325 consumer lawsuits were filed in 2022, representing the lowest number of consumer filings in ten years. However, a specific subset of consumer cases related to data breaches saw a significant jump from 283 filings in 2020 to 731 filings in 2022.
Rising Cost of Class Action Settlements
In recent years, the financial implications of class action settlements related to data breaches have been escalating. This trend is particularly noticeable in 2023, with several high-profile cases resulting in substantial settlement amounts.
The increasing costs can be attributed to a few key factors. Firstly, the sheer volume of individuals affected by data breaches has grown significantly, leading to larger classes and subsequently higher settlement amounts. Secondly, the nature of the data being compromised is becoming more sensitive - including financial and health information - which increases the potential damages awarded in these cases.
Moreover, courts are becoming more sympathetic to plaintiffs in data breach cases. They are recognizing the potential harm caused by such breaches, even when the harm is not immediately apparent. This shift in judicial attitudes is contributing to larger settlements.
Legal fees associated with these cases are also on the rise. As data breach litigation becomes more complex and requires specialized knowledge, legal teams are investing more resources into these cases, driving up costs.
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