Common Challenges in Proving Data Breach Damages

Proving damages following a data breach is often more complicated than those affected anticipate. Although personal data may be revealed or compromised, it is not always easy to establish financial damages. In fact, courts usually require direct evidence that the breach resulted in actual damages.

Individuals researching their rights often begin by understanding compensation after a data breach and the forms of damages that may be recovered. Nevertheless, simply recognizing what forms of compensation are available is only the beginning. To successfully prove those damages, certain evidence is necessary.

Why Is It So Hard to Prove Data Breach Damages?

Data breaches are a form of cyber-attack which involves digital data. This makes it harder to prove damages compared to a physical injury.

To win damages, a person has to prove the following:

• Actual financial damages
• Identity theft or fraud resulting from the data breach
• Emotional distress with evidence to support the claim
• Expenses incurred due to credit monitoring or fraud resolution

If a person fails to provide concrete evidence, it may be difficult to prove damages.

In cases of identity theft, a person has to provide evidence such as bank statements, fraud notifications, and credit reports to prove financial damages.

Merely being exposed to data breaches does not necessarily mean that a person is entitled to compensation.

The Problem of “Future Risk” Damages

The problem of ‘future risk’ damages is a significant issue that arises in the context of identity theft. Many identity theft victims believe that the release of their sensitive information puts them at risk of fraud.

However, courts often demand evidence of identity theft or its likelihood. Otherwise, claims for damages based on fear of future unauthorized use may be denied.

A plaintiff must demonstrate that the injury is concrete and actual, rather than hypothetical. This is a significant obstacle for plaintiffs who have not yet been defrauded.

Financial Losses: Documenting the Damages

The court and insurance companies require documented evidence of financial losses attributed to the data breach.

Some of the documented financial losses that can be claimed include:

• Credit card charges made without authorization.
• Withdrawals from bank accounts.
• Expenses incurred to replace stolen identification documents.
• Loss of income attributed to the time spent resolving fraud-related problems.

It is essential for victims to keep receipts and communication regarding fraudulent activities.

Emotional Distress and Time to Resolve Fraud

Some fraud victims may experience stress, anxiety, and inconvenience following a breach. But emotional distress is more difficult to measure.

A court may demand medical records, documentation of psychological treatment, and evidence of extreme disruption.

Time spent notifying banks or checking credit reports may also be taken into account, but compensation for mere inconvenience is not assured.

This presents another challenge, particularly for those who experienced stress but did not pursue professional help.

Class Actions vs. Individual Lawsuits

Breach of data cases are commonly brought as class actions. Class actions permit many plaintiffs to bring a suit together. But individual awards are typically small.

Individual suits may yield higher damages if there is substantial evidence of personal injury. But these suits demand more paperwork and may be more costly to bring.

It is essential to understand the advantages and disadvantages of each option when considering legal action.

Key Takeaways

• To establish damages in a data breach case, there must be tangible evidence of actual harm.
• Courts have dismissed claims for fear of future unauthorized use alone.
• Plaintiffs must trace actual financial losses to the breach at issue.
• Proof in the form of bank statements and reports of fraud is necessary.