CyBIR: Cyber and Privacy Breaches – Insurance and Reinsurance Data Privacy Lawyers: Walker Wilcox & Matousek Law Firm

Data Breach Insurers: Learning from Product Recall

Posted in Attorney Client Privilege, Product Recall Similarities

Data breach claims are often referred to as the new EPL claims: high volume, high intensity, low impact on most insurers’ bottom line.  But a more apt analogy is product recall litigation.

Product recall and data breach claims have a lot in common:

  1. they involve a problem with a major “brand,” whether cars, food or confidential data;
  2. the problem is often discovered internally before it is known by the public;
  3. lawyers and third parties investigate immediately, leading to privilege issues later on;
  4. governmental agencies require prompt notification and can levy fines and penalties;
  5. state and federal laws apply;
  6. the company’s reputation takes a hit;
  7. class action litigation is nearly inevitable; and
  8. someone usually loses his job.

Product recall cases differ from data breaches because they may involve criminal prosecution and/or bodily injury claims, although IOT can implicate bodily injury.

But product recall litigation is ahead of privacy cases when it comes to privilege attaching to pre-suit investigation  by lawyers and third parties.  For an interesting opinion on privilege and work product in the pre-suit stage, take a look at this opinion in the GM ignition switch recall litigation.   GM Ignition Switch Litigation (01303157xAE57E)