To date, courts have largely ruled against plaintiffs seeking damages in data breach cases. Last month, a federal court in New York demonstrated this, dismissing a consumer class action claim against Bank of New York that alleged negligence and breach of implied contract after unencrypted data was lost. However, companies would be wise to comply with data protection laws and breach notification requirements, say lawyers at Mayer Brown LLP, who predict that, though the court's trend has been to rule otherwise, plaintiffs will continue to push for class action suits seeking compensation for perceived harm in identity theft risks and say that "compelling business and legal reasons remain for companies to comply" with state, national and international laws. (Registration may be required to access this story.)
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