The Supreme Court has held that a claim for compensation under the Data Protection Act 1998 cannot proceed on an “opt-out basis” in the high profile Lloyd v Google LLC case. In doing so, it overturned the Court of Appeal’s decision, which would have opened the floodgates for class actions relating to loss of control of personal data to be brought on behalf of very large numbers of individuals.
The claimant, a former executive director of the UK Consumers’ Association, sought to bring the claim on behalf of a class of more than four million UK-resident iPhone users, alleging that some of their internet activity was secretly tracked by Google, for commercial purposes, in 2011/2012. He sought to use a representative action procedure, which allows an action to proceed on an “opt-out” basis, meaning that individual class members do not need to be identified, but those represented must share the “same interest” in the claim.
In its unanimous judgment, the Supreme Court found that:
- A claim for damages for the unlawful processing of data under the Data Protection Act requires proof of damage in the form of either material damage (such as financial loss) or mental distress. Such damage must be distinct from, and caused by, the unlawful processing. It could not be the unlawful processing itself.
- To determine the quantum of any damages, the court would need to consider the extent of the unlawful processing in the individual case, including for example the relevant time period and the quantity and nature of the data processed. Without evidence as to individual circumstances, it would be impossible to conclude that the damage was more than trivial, and therefore that there was a right to compensation.
For these reasons, the current attempt to bring an action for compensation on behalf of all those whose data was processed, without reliance on any individual circumstances of class members, failed.
However, the decision suggests that such claims could be brought using a “bifurcated process” in which the representative action procedure is used to determine common issues (such as whether there has been an actionable breach), leaving individual cases to be dealt with subsequently.
For further detail on the case, see this post on our Litigation Notes blog.
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