Lexpert Magazine

November/December 2018

Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.

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70 LEXPERT MAGAZINE | NOVEMBER/DECEMBER 2018 | DATA PRIVACY | about 50% from 2016 and more than dou- ble the 2015 total. No surprise, then, that an April 2018 Citrix Cloud and Security Survey of 1,505 Canadian residents, found that almost half (46%) of Canadians are either "not at all" or not "very secure" storing family information on the cloud. Medical information (52%) and financial information (59%) fare even worse. It all amounts to fodder for the plain- tiffs' class action bar. Privacy class actions have become ever more popular in this country in the last 10 years. Many engage more than 1 million consumers and $1 bil- lion in damages. High-profile defendants have included Google, Facebook, Equifax, Yahoo, Walmart, Home Depot, Scotia- bank, Banque Nationale de Canada, Bell Canada, Desjardins Group, Ford Motor Company, DaimlerChrysler, TD Auto Finance Services, Durham Region Health, and University of British Columbia. Although damages can be difficult to prove, at least one jurisdiction has adopted a statutory solution. "California has man- dated statutory damages of $750 per per- son notified," said Brian Hengesbaugh in Baker McKenzie LLP's Chicago office. "So if you're notifying 1 million people, you've got a big class action on your hands." From a global perspective, IDG, a multi- national tech media company, reports that the damage from global ransomware grew from $325 million in 2015 to an estimated $5 billion in 2017. To make matters worse, news event, like the GDPR [the European Union's recently enacted General Data Protection Regulation], or something bad has happened to them." HIGHEST DIRECT COST At press time, the latest federal sector vic- tim was Air Canada, whose mobile app was, compromising the personal informa- tion of some 20,000 users. But many more were affected: aer noting suspicious activ- ity in the account a week earlier, the air- line locked out all 1.7 million subscribers, who subsequently received instructions to change their passwords. While the costs of the Air Canada breach have not been disclosed by the com- pany, what is known from the Ponemon study is that Canada ranks first globally with the highest direct costs of $81 per record breached (all figures US), including legal and forensic costs and identity protec- tion services. In indirect costs — includ- ing the expenses and resources involved in a recent Ponemon Institute, LLC study es- timates that security breaches are increas- ing at a rate of 27.4% annually. "Privacy issues are everywhere," said Chantal Bernier, formerly Canada's In- terim Privacy Commissioner and now counsel in Dentons Canada LLP's Ot- tawa office. "Even good companies are be- ing subjected to sophisticated and inces- sant attacks." But pervasiveness, it seems, has not been a clarion call to action for the business community. A 2017 omson Reuters (owner of this magazine) study of 1,000 data privacy professionals at companies in nine countries found that almost half, or 44%, had not complied with data privacy regulations. Even more respondents, some 47%, advised that they were struggling to keep up or falling further behind. "Awareness is up, but preparedness is flat," says Ira Nishisato in Borden Ladner Gervais LLP's Toronto office. "We tend to get a spike from clients only when there's a CHANTAL BERNIER DENTONS CANADA LLP "Privacy issues are everywhere. Even good companies are being subjected to sophisticated and incessant attacks."

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