Data Privacy: The Next Big Lawsuit Bonanza

November 2, 2015

Thomas J. Donohue

In honor of October's designation as National Cybersecurity Awareness Month, the U.S. Small Business Administration (SBA) has unveiled a new Web page dedicated to promoting cybersecurity for small businesses. - See more at: http://www.businessnewsdaily.com/8491-sba-unveils-small-business-cybersecurity-tools.html#sthash.HVndjn45.dpuf
You’ve got to give the trial bar credit for being innovative. It has opened up a new frontier in the litigation sweepstakes—data privacy. Cyberattacks are growing in size and frequency, more and more consumers are exposed to them, and state and federal data privacy laws are complex and increasingly antiquated. That means the risk and potential liabilities are staggering.

These breaches impact businesses of all sizes and in every sector—from the corner hardware store running credit card transactions on Main Street to the largest Fortune 500 companies operating worldwide. Attacks against U.S. companies can come from anywhere in the world and hit customers everywhere. So the liability playing field is global. And thanks to mass hacks—compromising millions of customers’ data—there is no shortage of victims.

Plaintiffs’ lawyers can stay up to speed on the latest cyberattacks thanks to laws in almost every state requiring companies to report breaches to customers, government authorities, or both. They frequently troll news reports and public records, sometimes filing class actions within 24 hours of a data breach.

The U.S. Chamber and its Institute for Legal Reform are working to prevent data privacy from becoming a lawsuit bonanza for the trial bar.

We’re calling for uniformity in data breach liability laws—at home and abroad. Forty-seven states have different and conflicting laws on this topic. This chaos presents all kinds of opportunities for abuse. Congress is belatedly considering legislation to create a federal standard. Its goal should be to achieve real data security with legal clarity, rather than another big payday for the plaintiffs’ lawyers.

We’re using our resources to call out legal abuses of existing and prospective laws, both by regulators and the trial bar. Many states have passed or are contemplating amendments to privacy laws that allow for private rights of action, attorneys’ fees, and statutory penalties without proof of harm or damage caps.

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SBA Unveils Small Business Cybersecurity Tools
Credit: Mark Van Scyoc

In honor of October's designation as National Cybersecurity Awareness Month, the U.S. Small Business Administration (SBA) has unveiled a new Web page dedicated to promoting cybersecurity for small businesses.

In the wake of high-profile data breaches, many businesses are eager to implement a more robust cybersecurity strategy. The SBA's cybersecurity page, launched earlier this month during the "Cybersecurity at Work" week, offers advice and tools for small business owners who are seeking to better protect both their own data and their customers' data. In 2013, 44 percent of the 800 small business owners surveyed reported having experienced a cyberattack that resulted in an average cost of nearly $9,000, according to a report by the National Small Business Association.

"Cybersecurity is one of our nation's most pressing national security priorities, and America's 28 million small businesses, which create two out of every three new jobs in the U.S., are especially at risk," SBA Administrator Maria Contreras-Sweet said in a statement announcing the Web page. "Small employers are quickly becoming a larger target for criminals looking to access sensitive data because small businesses typically have limited resources for information systems security. In an effort to combat cyberattacks against small businesses, the SBA's online tools will help employers identify information security vulnerabilities that put their companies at risk."

- See more at: http://www.businessnewsdaily.com/8491-sba-unveils-small-business-cybersecurity-tools.html#sthash.HVndjn45.dpuf
In honor of October's designation as National Cybersecurity Awareness Month, the U.S. Small Business Administration (SBA) has unveiled a new Web page dedicated to promoting cybersecurity for small businesses. - See more at: http://www.businessnewsdaily.com/8491-sba-unveils-small-business-cybersecurity-tools.html#sthash.HVndjn45.dpuf