Courts broaden liability for data theft.

• Position: LEGAL - Brief article

U.S. federal courts are widening their definition of the damages caused by data breaches, according to an October 29 article on csoonline.com. Whereas courts previously dismissed these lawsuits unless the victims could show specific damages, judges increasing are now awarding them class-action status--a trend that puts organizations at greater risk of huge payouts.

These payouts can be significant. A study conducted by the Temple University Beasley School of Law and published in early 2012, "Empirical Analysis of Data Breach Litigation," found that although the mean value of settlements awarded per plaintiff was just $2,500, the mean...