Monday, August 01, 2005

Larger class-action firms shy away from privacy suits, leaving the field open for smaller firms

Recent privacy and security incidents have spawned a whole range of class action lawsuits, but reports the larger class-action firms in the US are shying away. Into that gap has stepped a number of smaller firms, looking to make precedent in this untested area:

American Lawyer Media's - Small Firms Blaze a Trail for Privacy Suits

"Matthew Righetti says companies that leak consumer data should be forced to pay. But the San Francisco plaintiffs lawyer can't say how much. Or, for that matter, whether any court would agree with him.

In fact, no one is sure. While electronic privacy breaches have caught the attention of big media -- the Wall Street Journal wrote Monday that they're generating large class actions -- the major class action firms have shied away from.

Since the cases rest on untested laws -- and often involve victims with no monetary losses -- the big plaintiffs firms are letting smaller outfits like Righetti's take the first steps in a litigation area with equally great risks.

Eager to find new practice areas without competition from the big firms that dominate consumer and securities class actions, the small plaintiffs shops have been happy to oblige.

Basing their complaints on disclosure notices that companies, under California law, send to customers whose financial data has been leaked, a bevy of small firms has aggressively pursued the suits.

While the plaintiffs lawyers say the notices fairly reek of liability, the outlook is so uncertain that small plaintiffs shops feel forced to share the risk of privacy suits with other firms...."

Thanks to Rob Hyndman for the pointer to this story.

No comments: