How Delayed Data Breach Disclosure Can Amplify Liability?

When your data has been compromised, you must learn about it quickly to minimize your own harm. When a company has failed to protect your data, and you have suffered damages, the national data breach lawyers at Federman & Sherwood can work for you to be compensated.

Not only does a company have the legal obligation to protect your sensitive data at all times, but they must also notify you within the timeframe specified by individual states. If that company does not notify you promptly, it can increase the amount of damages that you sustained. When that happens, you may be entitled to more money in a data breach lawsuit when you file it and win.

You can hold a company that failed to protect your dad legally accountable, and Federman & Sherwood can fight for that outcome. Speak to a national data breach attorney today to learn about the potential for filing a lawsuit. Call our law firm at (800) 237-1277.

A Company Must Promptly Notify You of a Data Breach

Each state has its own individual law that governs how long a company has to notify you when your sensitive data has been compromised. Most states have some type of requirement that you be notified “without unreasonable delay.” Some states have their own specific time frames that place an outer limit on when the notification must occur. Regardless of whether the entity complies with the law to the letter, they have their own interests in notifying affected consumers as soon as possible.

When someone who holds your data has been negligent, or they have otherwise broken the law, they must pay damages for all of the harm that you have suffered. The longer that an entity waits to notify you, the less able you are to take the necessary steps to protect yourself. With proper notice, you can at least take some steps to mitigate your damages, such as placing a freeze on credit inquiries and knowing to be vigilant about checking your accounts for suspicious activities. The more time that passes without you knowing that there has been a breach of your data, the greater the chance that someone can cause even more harm to you.

Delayed notification was a prominent theme in the massive class action lawsuit filed against Yahoo after one of the largest data breaches of all time in 2013-2014. In this case, Yahoo waited one to two years after discovering the breach to notify affected people. Here, the court found that there were “incremental damages” beyond the breach itself that occurred due to the delay in notification.

Delayed notification can also present additional issues for the entity in the legal process. Whether they are facing a large class action lawsuit, or potential enforcement action from regulators, the entity may be judged on how they responded to the data breach. Delayed notification is another example of carelessness and lack of regard for duty that can make a bad situation worse for the holder of your data.

How Do I Know That Notification Was Delayed?

When it comes to how a court may assess a delayed notification, they may consider the following questions:

• When did the company actually learn of the breach?
• How long after the breach did they wait to notify affected parties?
• Were there internal communications among employees that show the company knew about the breach earlier than when they informed the public?
• Did the company comply with its obligations under state law?

Oftentimes, the answers to these questions show that the company knew that there was an incursion into their systems, yet they waited to inform those who were impacted. If a lawsuit progresses far enough, the plaintiffs will be able to conduct discovery that can allow them to obtain the answers to these questions. In many cases, the company may blame a third party for the delay, although that is not always a compelling defense.

Delayed Notification May Also Increase Liability in a Shareholder Derivative Lawsuit

There is another way that untimely notification can increase liability. In many recent data breach cases, shareholders have filed derivative lawsuits against the officers and directors for the damages that they have caused to the company through their own negligence. It is these officers and directors who take the quick and comprehensive actions that can potentially minimize liability. These directors and officers could end up facing more significant personal liability in a shareholder derivative lawsuit because they have failed in their own fiduciary duties that they owe to the owners of the company.

Contact a National Data Breach Law Firm

Have you received a notice that your sensitive data has been compromised? If so, speak to the national data breach attorneys at Federman & Sherwood to explore the possibility of filing a lawsuit. Schedule a free initial consultation by visiting our website or by calling us today at (800) 237-1277.