Data protection compensation – an alternative route?

Compensation for data protection breaches can be difficult to secure – but if the data controller is a public authority there may be an alternative to legal claims

One of the outcomes of what was by any standards a disastrous breach of the Data Protection Act 1998 (DPA) was announced this week, when Hodge Jones & Allen LLP (who might want to proofread their press releases a bit better) issued a statement saying that they had secured compensation payments totalling £43,000 for fourteen residents who had brought claims against Islington Council. They were among fifty residents whose personal data was mistakenly given to ten people upon whom the Council was serving anti-social behaviour orders (ASBOs). As the Islington Gazette reported at the time

council staff passed details of 51 people, many of whom had complained about antisocial behaviour (ASB) on the council’s flagship ASB hotline, to 10 thugs who had been causing trouble on the Andover estate, off Seven Sisters Road, Holloway…The gang, who had been smoking drugs and abusing passers-by, now have the names, street names and phone numbers where given of the residents, after the information was inadvertently attached to injunctions banning them from the estate…Police activity has been stepped up on the Andover, but many victims of the breach are from other areas.

The Gazette also reported that six families were to be rehoused, no doubt at considerable cost to the Council.

The law firm’s announcement (which also appears to relate to claims made by people who, in a separate incident involving the same council, had their personal data inadvertently exposed on a website) means, of course, that any claims will not go to trial, and we will not get the chance of a judicial determination of whether, or to what extent it is possible for claimants in these circumstances to gain compensation for pure distress, in the absence of actual damage.

Data Protection lawyers and practitioners will be well aware of this issue, and I wrote about it earlier this year. To crib my own post:

Section 13(1) of the Data Protection Act (DPA) provides a right to compensation for a data subject who has suffered damage by reason of any contravention by a data controller of any of the requirements of the Act.  The domestic authorities are clear that “damage” in this sense consists of pecuniary loss. Thus, section 13(1) is a “gateway” to a further right of compensation under section 13(2)(a), for distress. The right to distress compensation cannot be triggered unless section 13(1) damage has been suffered….[the position is unclear as to] whether nominal, as opposed to substantial, damages under section 13(1), could suffice to be a gateway to distress compensation, and, indeed, whether the DPA effectively transposes the requirements of the European Data Protection Directive to which it gives effect

In the instant cases, it is actually possible that substantial actual damage could have been suffered, but, more probably, these again were cases where (no doubt very high levels of) distress would have lacked compensation for want of the section 13(1) gateway.

In terms of the Council itself, as data controller, it was served by the Information Commissioner’s Office (ICO) with a monetary penalty notice (MPN) of £70,000 for the DPA contravention which led to the “website incident”, and it appears that enforcement action may well result from the ASBO incident (one wonders if the ICO was awaiting the outcome of these legal claims). The ICO will need to determine whether it was a serious contravention of the DPA, of a kind likely to cause substantial damage or substantial distress (for analysis of what this requires, see my recent post here). Such MPNs do not though, in any case, compensate victims, but serve to punish the data controller (and the money goes into the government’s consolidated fund).

The Local Government Ombudsman

One does not know what the specific arrangements were between the claimants and their lawyers, but, unless the work was pro bono some fees will no doubt be owed from the former to the latter. It does occur to me that the claimants had an alternative way of seeking a remedy. The Local Government Ombudsman (LGO) investigates complaints made by people alleging administrative fault (“maladministration”) causing injustice, arising from actions or inactions of local authorities. In 2008 the LGO issued a report following investigation of a complaint that Basildon Council had

published personal and sensitive information about traveller families and their children on its website and in a report that was considered in the open part of a Council committee meeting, where copies were available to members of the public and the press who attended. The information included medical details, and the names and ages of all the children living on the site

But what is particularly interesting is that the LGO’s investigation was informed by a prior finding by the ICO in this matter (uncontested at the time by the Council) that the Council had been likely to have contravened the first data protection principle. The LGO has the power to recommend compensation payments, and in this case recommended each complainant be paid £300. Those payments were eventually effected, albeit after judicial review proceedings (an LGO recommendation is not actually binding on a council, although in the vast majority of cases they are complied).

It does seem to me that the Islington claimants could possibly have gained similar, or more compensation, by making a complaint to the LGO. It also seems to me that – where a DPA contravention by a local authority causes distress but no damage – aggrieved data subjects could consider whether the LGO could assist. And on a similar basis, where the contravention has been by a government department, or the NHS, or some other public bodies, whether the Parliamentary and Health Service Ombudsman could assist.

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Filed under damages, Data Protection, Information Commissioner, monetary penalty notice, ombudsman

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