Some welcome respite for data controllers faced with low-level data breach claims

From 1 October 2023, fixed recoverable costs (FRC) were extended across the fast track, and a new intermediate track for cases valued up to £100,000 was introduced to cover less complex multi-track cases valued under £100,000. 

The new FRC regime will significantly impact practitioners working on civil litigation cases such as low-level data breach claims as the parties can now only recover smaller, fixed amounts than they would otherwise have previously.

Currently, some low-level data breach claims can be disposed of fairly within the small claims track. A consequence of the court’s approach to damages in these claims in recent years is a growing recognition that claims should very often be allocated to this track. This is because actual damages often bear no relation to the sometimes inflated amounts claimed.

However, for those claims which are not allocated to the small claims track, the extension of the FRC regime will limit costs given and there will no longer be assessment of costs on the standard basis. This will therefore disincentivise those who bring potentially fanciful claims expecting a monetary settlement to avoid litigation costs.

Often parties add further heads of claim to increase complexity and bring a claim out of the small claims track to recover costs. Now, as the FRC regime covers the fast track and the new intermediate track, many data protection-based claims will most likely fall in to the new FRC regime.

An example of a low-level data breach claim is where a Registered Provider (‘RP’) sends an email containing personal data  inadvertently to the wrong entity. This is, broadly speaking, a technical breach of the UK GDPR. Subsequently, many firms threaten legal action on this basis and RPs quickly settle and pay damages where they do not necessarily need to in order to avoid hefty costs of litigation and the reputational damage of court proceedings. Now, as under the new regime the costs are fixed and controlled, it is anticipated that less claims will be brought to enforce a pay-out. RPs will welcome the decrease in claims as claimant firms may not find it effective to issue.

Parties need to assess and concentrate more than ever on whether a claim is worthy of issuing given the low costs of recovery and as with any fixed fee set up, a ‘creative’ claim will look less attractive to bring. Any settlement, whilst it should always have been taken seriously in any event, will need to be thoroughly considered bearing in mind the level of costs recovery as set out in the FRC regime.

If you would like further information, please get in touch.