"It's true that a lot of data breach cases are settled before the class is certified. Berger said plaintiffs also face potential risk with class certification motions, which are approved by a judge to allow multiple claims against a breached organization to be group into a class action lawsuit. "The hackers are looking for low-hanging fruit, and the companies that get breached are the ones that have poor security so there's a lot of risk for them to continue because their executives and directors and higher-ups who make decisions about settling cases do not want to see the bad press that's going to come their way."īut the benefit of settling data breach lawsuits doesn't just apply to defendants. But I have yet to see a situation where I've gotten into a case I say, 'Oh my gosh, how did these hackers ever break in?' That is not my experience at all, and I've been around the block on these cases," Berger said. "Often, data breach defendants like to portray themselves as the victims of criminal acts, and there certainly have been. He said he's seen "appalling security lapses" at the companies that have been breached, and those lapses are usually easy even for non-technical people to understand. "It's a new area of practice and there just aren't that many that really get that far." Avoiding riskīerger agreed with Yanchunis' point that breached companies want to avoid potentially making a bad PR situation even worse in a public trial, adding that it would not look good to see it get out that a company has poor security. "You're still looking at a relatively small sample size when you're looking at litigated data breach cases," Berger said. He also said data breach lawsuits are relatively new territory. I think for one thing, the potential for damages - the public perception that a company doesn't care about the privacy of consumers and therefore are willing to say 'go try it.' I think that's bad public relations."ĭavid Berger, partner at Gibbs Law Group LLP, has also worked on several data breach lawsuits, including Equifax, and said in general, only about 2% of overall lawsuits go to trial in the federal court system. The reason companies settle, he said, is that "there are tremendous risks to a company facing a data breach to take a case to trial. The firm is also currently suing Facebook for the Cambridge Analytica scandal. Yanchunis' firm has handled plaintiffs' claims for a number of major cases, including Equifax and Yahoo.
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