Compensation claims for data breaches can now be made regardless of whether or not financial loss occurred, law firm Moore Blatch has warned following a recent ruling.
Previously the Data Protection Act 1988 was interpreted as allowing compensation claims only if there was a financial loss as a result.
The ruling in Google Inc. v Vidal-Hall, that will now be interpreted, shows that emotional impact, such as anxiety or distress, means financial loss no longer needs to be shown.
The law firm warned that it is likely there will be more claims for compensation as a result and could be very costly for brokers.
John Warchus, partner at Moore Blatch, says: "Brokers, or indeed anyone in control of 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.
"Brokers 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."
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