Cybersecurity, Identity Theft, and the Limits of Tort Liability


This article considers to what extent database possessors (such as credit card companies and universities) can be held liable for harm caused to data subjects (such as consumers, applicants, and alumni) when information relating to those persons is hacked or otherwise subject to improper access. Addressing common-law and statutory sources (including new legislation in 17 states) the article clearly differentiates the duty to safeguard data from the duty to notify data subjects that the security of their information has been breached. By analogy to the “medical-monitoring damages” which some states award in toxic-exposure cases, the article argues that “security-monitoring damages” should be available in database-intrusion cases. More specifically, the article proposes that, in cases of ordinary negligence, the interests of society will be best served by limiting recoverable economics losses to the cost of security-monitoring damages once a database possessor discloses to the affected individual the fact that data has been improperly accessed. This approach will encourage database possessors to discover and reveal instances of data intrusion. It will also place data subjects in a position to protect their own interests by monitoring their economic and personal security when there is heightened vulnerability.



Date of this Version

August 2005