Ibrahim Hasan considers what data protection officers need to know from the landmark ruling from the Supreme Court.
Last week, the UK Supreme Court handed down its much anticipated judgment in the case of Lloyd v Google LLC  UKSC 50. It is a significant case because it answers two important questions (1) whether US style class action lawsuits can be brought for data protection claims and (2) whether damages can be claimed for mere “loss of control” of personal data where no actual damage has been suffered by data subjects. If the Supreme Court had decided that the answer to either of these questions was “yes”, it would have resulted in Data Controllers being targeted with much more costly data breach litigation.
The present case was brought by Richard Lloyd, a former director of consumer rights group Which?, who alleged that between 2011 and 2012, Google cookies collected data on health, race, ethnicity, sexuality and finance through Apple’s Safari web browser, even when users had chosen a “do not track” privacy setting on their phone. Mr Lloyd sought compensation, under section 13 of the old Data Protection Act 1998.
Mr Lloyd sought to bring a claim in a representative capacity on behalf of 4 million consumers; a US style “class action”. In the UK, such claims currently need consumers to opt-in, which can be a lengthy process (and costly). Mr Lloyd attempted to set a precedent for opt-out cases, meaning one representative could bring an action on behalf of millions without the latter’s consent. He sought to use Rule 19.6 of the Civil Procedure Rules which allows an individual to such bring a claim where all members of the class have the “same interest” in the claim. Because Google is a US company, Mr Lloyd needed the permission of the English court to pursue his claim. Google won in the High Court only for the decision to be overturned by the Court of Appeal. If Mr Lloyd had succeeded in the Supreme Court on appeal, it could have opened the floodgates to many more mass actions against tech firms (and other data controllers) for data breaches.
The Supreme Court found class actions impermissible in principle in the present case. It said that, in order to advance such an action on behalf of each member of the proposed represented class, Mr Lloyd had to prove that each one of those individuals had both suffered a breach of their rights and suffered actual damage as a result of that breach. Mr. Lloyd had argued that a uniform sum of damages could be awarded to each member of the represented class without having to prove any facts particular to that individual. In particular, he had argued that compensation could be awarded under the DPA 1998 for “loss of control” of personal data constituted by any non–trivial infringement by a data controller of any of the requirements of the DPA 1998.
The Supreme Court rejected these arguments for two principal reasons. Firstly, the claim was based only on section 13 of the DPA 1998, which states that “an individual who suffers damage by reason of any contravention by a data controller of any of the requirements of this Act is entitled to compensation from the data controller for that damage”. The court ruled that “damage” here means material damage, such as financial loss or mental distress, as caused by unlawful processing of personal data in contravention of the DPA 1998 (i.e. simply infringing the DPA 1998 does not in itself constitute “damage”). Secondly, in order to recover compensation under section 13 of the DPA 1998, it is necessary to prove what unlawful processing (by Google) of personal data relating to each individual actually occurred. A representative claim could have been brought to establish whether Google was in breach of the DPA 1998 as a basis for pursuing individual claims for compensation but not here where Mr Lloyd was claiming the same amount of damages (£750) for each of the 4 million iPhone users.
This case was decided under the DPA 1998. Article 82(1) of the UK GDPR sets out the right to compensation now; “Any person who has suffered material or non-material damage as a result of an infringement of this Regulation shall have the right to receive compensation from the controller or processor for the damage suffered”. The similar wording to the DPA 1998 means that the outcome would be the same if Mr Lloyd had commenced his action post GDPR.
The Lloyd-Google judgment means that those seeking to bring class-action data protection infringement compensation cases have their work cut out. However, claims under Art 82 can still be brought on an individual basis – in fact the judgment seems to indicate that individual cases can have good prospects of success. There is more to come in this area. TikTok is facing a similar case, brought by former Children’s Commissioner Anne Longfield, which alleges that the video-sharing app used children’s data without informed consent.
This and other GDPR developments will be discussed in detail on Act Now's forthcoming GDPR Update workshop. Act Now has one place left on its Advanced Certificate in GDPR Practice course starting in January.