Companies that fail to protect their customers’ information are likely to face lawsuits in the year 2023, as impacted customers are no longer willing to tolerate such acts at the expense of their privacy and financial losses.
This legal turn is supported by a study conducted by BakerHostetler, which confirms that lawsuits against companies that suffer data breaches are becoming more common and may increase by the end of this year.
The 2023 Data Security Incident Response Report was compiled after gathering responses from more than 1,100 cybersecurity professionals, and it suggests that businesses’ tolerance levels have declined. Almost all of those who suffered consequences related to a data spill are likely, or have already, filed a lawsuit against their technology partners.
Among the impacted incidents, 45% were network intrusions, 30% were business email compromise, and 12% were unintended information disclosure.
Surprisingly, the analysis conducted by American law firm BakerHostetler found that victims who made ransomware payments increased in the year 2022 compared to 2021. Additionally, the average ransom amount paid last year was recorded as $600,000, up from the $511,000 payment made in 2021.
Now the big question: Is there any benefit in filing a lawsuit against the technology service provider for a data breach? Well, under certain circumstances, local laws stipulate that all companies dealing with customer data must efficiently use resources and funds to protect the information from cybercriminals and state-funded hacks. Those that fail to do so will be eligible for prosecution by data watchdogs, also known as Information Security Commissioners. Impacted customers are entitled to file a lawsuit against their service provider if sensitive details related to them, individually or as a group, are leaked to hackers. Receiving a monetary favor for the loss is totally idiosyncratic and depends on the intensity of the breach, leaked info, and the failure of the company that was storing the data. By the way, data spills occurring from state-funded hacks are no longer covered under cyber insurance.