IT consultancies are in danger of paying compensation for data breaches even if no financial loss occurs, following a landmark court case involving Google, according to the law firm Moore Blatch.
A judgement by the Court of Appeal last month clarified the law when ruling on Google Inc v Vidal-Hall, breaking from previous interpretations that required financial loss to be proven before compensation was awarded to a claimant.
John Warchus, partner at Moore Blatch, said: "IT consultants, or indeed anyone in control of client data, will now have an even stronger incentive to comply with data protection rules.
"The decision by the Court of Appeal is also consistent with the likely future trend of data protection legislation – the draft EU Data Protection Regulation will mean that someone can seek damages regardless of a financial loss.
"IT consultants should urgently review their data protection procedures and strengthen where necessary as more compensation claims are likely and the amount of damages awarded is also likely to increase."
As a result of the decision, data breaches that have an emotional impact on the claimant or are seen to breach their privacy could now lead to compensation being paid.
Moore Blatch suggested that the ruling will increase the numbers making claims for reasons of distress or breach of privacy, and that it could also prompt a rise in class-action lawsuits brought by groups of people.
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The case in question involves a dispute over the alleged bypassing of Safari web browser settings instructing Google not to track users as they used their Apple devices.
Google had attempted to have the case thrown out of the British justice system, and has previously paid $40m in the US to settle similar claims, but the British court ruled that the alleged actions of the search engine "merit a trial".
Speaking to the BBC at the time, complainant Judith Vidal-Hall said of the ruling: "Ordinary computer users like me will now have the right to hold this giant to account before the courts for its unacceptable, immoral and unjust actions."
