The
A data breach can cause harm to affected individuals in many ways. The publication of sensitive health information (for example, that an individual had an abortion, is suffering a sexually transmitted disease, or has a mental illness) can cause distress, psychological harm and reputational damage. The misuse of an individual's identity documents can cause financial loss. In some cases, the disclosure of an individual's address can put them at risk of physical harm.
If an individual who suffers harm as a result of a data breach decides to seek compensation, they currently have two options.
Firstly, they can lodge a complaint with the
Secondly, they can commence legal proceedings. If a class of people are affected, a class action can be commenced. Currently, there is no specific cause of action for a data breach, so the plaintiff's main argument will usually be that the business was negligent in failing to adequately protect the personal information they held. The Commonwealth Government is proposing to introduce a specific cause of action for breaches of the Privacy Act later this year.
Until now, representative complaints and class actions have been exceedingly rare in
However, this may be about to change, thanks to the
The class actions, in particular, will be watched closely by lawyers. If they proceed to trial, the parties will argue about a variety of issues that have not previously been considered by an Australian court. Does a business have a duty of care to its customers and employees to protect the personal information it holds, and what is the standard they must meet to satisfy that duty? How can an individual prove that the harm they suffered was a result of this particular data breach? Should individuals be able to claim damages for psychological or emotional harm suffered as a result of a data breach - and if so, is general distress sufficient, or must a specific mental injury be diagnosed? The court's decision on these issues will help establish whether data breach class actions are worth conducting in
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