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Are Cybersecurity Lawsuits a Potential Threat to Your Business?


Digital applications and innovations certainly help us when it comes to streamlining business functions, communicating with customers, managing reports, and integrating internal collaboration among stakeholders. However, these digital advancements have come with a cybersecurity cost. If the number of cybersecurity breaches mentioned in the news is any indicator, corporate hacking is increasingly becoming commonplace. As more businesses migrate from brick-and-mortar to online service models, they are targeted by threat actors who try to steal their business-critical data. The data that is being stolen includes intellectual property, business secrets, even customers’ personal and financial information. 

The theft of customer data can have severe and long-lasting effects on victims. Damages range from late fees and higher credit monitoring costs to greater difficulty obtaining future credit and even outright identity theft. When damages occur, cybersecurity lawsuits may become a threat to a business and hit in various ways that go beyond significant financial losses, including losing customers, a tainted market reputation, and ongoing regulatory troubles.

What are Cybersecurity Lawsuits? 

If a business doesn’t have adequate security safeguards to prevent common human errors, hackers can easily steal the confidential data of its customers. 

Over the past few years, consumer protection attorneys have brought class-action cybersecurity lawsuits regarding data breaches on behalf of many users. Customer victims are typically those whose credit card information was compromised or stolen from a corporation’s records due to security negligence. A bigger class-action increases the likelihood of a hefty financial loss for the breached organization, either in the form of a large out-of-court settlement and/or a heavy fine. 

What Can a Cybersecurity Lawsuit Cost You?

Cybersecurity lawsuits can cost the average company a pretty penny – anywhere from thousands to hundreds of millions of dollars. For instance: 

  • In 2013, hackers broke into Target’s systems and stole the personal information of almost 70 million consumers. Target ended up paying $10 million to victims and another $39 million to banks following numerous cybersecurity lawsuits. 

  • In 2020, Home Depot also had to settle with customers for $17.5 million whose credit card information was stolen by hackers.

In some cases, a cybersecurity lawsuit can cost lives, for instance, if a hospital has to postpone surgeries as it grapples with the legal and financial implications. In others, it can affect the quality of life and cause social havoc. For example, in July 2021, Leonardtown, in Southern Maryland (USA), was hit by the sprawling Kaseya IT software hack, leading to the loss of control on over 17 of its 19 computers. The city had to stop billing residents for electricity, they also had to block paychecks from going out to town employees. Similarly, following the Colonial Pipeline ransomware attack in May 2021, hundreds of gas stations were forced to shut down, leading to huge fuel shortages across vast swathes of the USA.

Should You Worry About Cybersecurity Lawsuits?

The increase in the number of cybersecurity lawsuits in current times suggests that organizations may not be as proactive as they can be when protecting their computer and network assets. Inadequate security systems are likely to result in a breach and leave customer’s data vulnerable.

In the past, even in cases of big data breaches, courts were reluctant (or at least skeptical) to acknowledge that stolen personal information from a company’s network could lead to actual harm to either the end victims or to the company itself. Over time, as the number of incidents has increased, courts now look at these cases differently and recognize that cybersecurity lapses can hurt real people in real ways.

In an effort to get companies to strengthen their cybersecurity systems, modern courts are more willing to entertain high-profile cybersecurity lawsuits. In some cases, companies have paid hefty fines or settlements but still managed to survive, while in others, organizations went bankrupt or out of business. Cybersecurity breaches are on the rise, it is recommended that regardless of size, every business or organization should strengthen their security posture. When it comes to cybersecurity and cybersecurity lawsuits, prevention is always, always better than being reactive.


Most cases of data breaches followed by cybersecurity lawsuits end up in a settlement since companies find it easier to pay off hacking victims instead of trying to fight protracted court battles which cost them in terms of both money and time. 

Every company’s main focus should be to avoid cybersecurity lawsuits. This means implementing a tamper-proof system to safeguard the personal information of your consumers from ransomware, phishing and other kinds of cyberattacks. And we are here to help you with it.

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