The law firm Bryan Cave, LLP reported an increase in class-action data breach lawsuits faced by the healthcare industry last 2016. This doesn’t mean, however, that the litigation following a breach also increased. Bryan Cave conducted the 2016 comprehensive review of class action lawsuits filed by data security breaches victims to prepare for the 2017 data breach litigation report.
The report mentioned the likely threat of legal action taken by data breach victims against healthcare companies, but the actual risk of facing litigation following a breach is rather low because showing proof that the breach caused an injury caused is quite difficult for plaintiffs.
The increase in class action lawsuits filed against healthcare companies is 7% year over year. But the resulting lawsuits decreased, in fact, only 3.3% of data breaches led to class-action lawsuits in 2016 whereas it was 4% to 5% in previous years. There were 76 class action lawsuits filed in 2016. Of the 76 lawsuits, 27 were unique defendants. Bryan Cave pointed out that the lawsuits were associated with the same high-profile breaches.
The report also named the healthcare industry as having the most data breaches – 70% of the total recorded data breaches involving different industries. But there were only 34% class action lawsuits with healthcare organizations as defendants. Twenty-six complaints were filed. Email providers got 33% class action lawsuits. Restaurants got 11% and the retail industry got 7%.
89% of filed lawsuits were often due to exposure or theft of personal information such as medical data, Social Security numbers, security Q&As and health insurance information. 65% of the lawsuits were complaints of alleged negligence.
The distribution of data breach lawsuits is as follows: 32% was filed in the Northern District of California; 11% was filed in the Middle District of Florida and in the District of Arizona; and 7% was filed in the Western District of Pennsylvania.