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Race to the Courthouse? Class Action Suits Following Breaches on the Rise

Litigation over data breaches is on the rise, with affected individuals quick to sue and smaller incidents increasingly yielding class-action lawsuits, a new analysis of data breach responses found.

The 2022 report from BakerHostetler, Digital Assets and Data Management – Resilience and Perseverance, quantified litigation trends surrounding data breaches in all industries, including health care.[1]

“In 2021, there was a trend of multiple lawsuits being filed in the same venue within weeks following incident notification, even for smaller incidents,” the report said. “Previously, there was always a risk of multidistrict litigation following large data incidents. However, now we are seeing multiple lawsuits following an incident notification in the same federal forum. Or, in the alternative, we see a handful of cases in one federal forum and another handful of cases in a state venue.”

This is “increasing the ‘race to the courthouse’ filings and increasing the initial litigation defense costs and the ultimate cost of settlement, due to the number of plaintiffs’ attorneys involved,” the report said. BakerHostetler clients were involved in 536 breach notifications in 2021, and 23 of those incidents resulted in lawsuits.

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