Privacy Litigation More Concerning than the Cost of Cyberattacks

Joseph J. Lazzarotti of the Jackson Lewis firm notes that the concept of privacy underpins critical principles and rights in our legal system. He wonders if privacy risk is bigger than cyber risk for companies that collect personal private information.

The vast patchwork of privacy laws in numerous jurisdictions is making privacy a major insurance concern. Insurers now view privacy laws as a big litigation risk for companies. Compliance attorneys have a sense that the mishandling of personally identifiable information could soon rival the cost of ransomware attacks.

Processing personal information pertaining to employees, applicants, and vendors creates an additional layer of privacy risk which effects all industries. Some of the risk factors are:

• The use of AI in hiring and promotion
• Workplace surveillance
• Managing employee medical information
• Maintaining employee benefit plans. 

Litigation involving the collection of personal information of website users through tracking technologies without consent, commonly known as “pixel litigation,” is already causing privacy costs. Other methods of collecting and sharing personal information can also have severe consequences under federal and state consumer protection laws. 

Another risk to consider is that an organization’s website privacy policy may create a binding obligation, even if there is no law requiring such a rule.