Client Data Warning for Landlords

It follows the ruling in the recent Google Inc. v Vidal-Hall court case, where the Court of Appeal clarified the rules under the Data Protection Act 1988, which were previously interpreted as allowing compensation claims only if a data breach caused a financial loss.

Following clarification by the court, Clause 13 of the Act will now be interpreted so that financial loss no longer needs to be shown for a compensation claim for emotional impact on the claimant, such as anxiety or distress. The previous interpretation had meant that compensation was not available for most breaches.

The decision is likely to have a number of potentially wide-ranging implications, including an increase in claims for compensation under Clause 13, and a likely rise in class actions, in which a large number of individuals have suffered emotional distress or invasion of privacy due to the same data breach. Such claims could be very costly to landlords in terms of damages.

John Warchus, Partner at Moore Blatch, said: “The decision by the Court of Appeal is also consistent with the likely future trend of data protection legislation - the draft EU Data Protection Regulation will mean that someone can seek damages regardless of a financial loss.

“Landlords should urgently review their data protection procedures.”