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Dublin: 11 °C Thursday 20 June, 2013

Insurer ordered to pay costs in data breach case

A High Court judgement is being hailed as a landmark ruling which makes businesses legally liable for data protection breaches.

Image: Insurance policy document via Shutterstock

THE INSURANCE COMPANY FBD has been ordered to pay High Court costs to a man following a case in which he claimed his data protection rights had been breached.

The High Court last week vacated the Circuit Court award of €15,000 in damages to Michael Collins in March 2012 but did rule that there had been a clear and intentional breach of data protection legislation as a result of FBD’s actions and awarded him costs in the case.

The case concerned a claim that Collins made nearly five years ago when his work van was stolen outside his home in Finglas, north Dublin in September 2008.

Collins lodged a claim with FBD for loss of work as a result of not having the van for three months until it was later recovered and his claim was withdrawn.

However during that period FBD declined to deal with his claim on the basis of confidential information it had obtained about him concerning a previous conviction against him.

The insurer failed to disclose this information to Collins in accordance with data protection law and was later ordered to pay him €15,000 in damages.

FBD had argued that there had been gross non-compliance by Collins who had an obligation to disclose the information concerning his previous conviction though it accepted it had breached data protection law.

This €15,000 award was vacated in the High Court last week but Justice Kevin Feeney did rule that that there had been a clear and intentional breach of the Data Protection Act and the manner in which FBD conducted itself was unacceptable, awarding costs to Collins.

He said that the provisions of the DPA placed an obligation on a data controller i.e. FBD to “exercise a duty of care”.

“A breach of that duty of care can result in an award of damages. In this instance, the entitlement is not to damages for breach of duty but compensation for breach of duty,” he said.

“Compensation is intended to place an individual in the position which that individual would have been apart from the wrong done.”

Solicitor for Collins, Fintan Lawlor said the judgement of the High Court was welcome as it had “given clarity” to section 7 of the Data Protection Act “highlighting that compensation may be awarded where damages can be proven”.

“Corporations must ensure there are practices and procedures in place to ensure there that no damage is caused to the individual as a result of a breach of the Act,” he said.

Read: Insurance companies to have full access to drivers’ offences

Read: Complaints to Financial Services Ombudsman up 12% last year

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Comments (16 Comments)

  • So FBD got fined but what fine did Collins pay for lying on his insurance form?

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  • Silly comment Tim. The insured didnt disclose information which was relevant to his policy. The ruling was for breach of data law, not related to the insurance claim. Important distinction Tim. You would wonder how he got his van back after three months.

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  • tom 18/03/13 #

    This is and can only be a good thing for everyone. It is a victory for data protection laws instead of being misused by large corporations.

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    • Barry 18/03/13 #

      +1 My question, where EXACTLY are you supposed to tell them you had a conviction. I just filled in an Aviva online quote and don’t remembers seeing anything. Second question what was the source of the “confidential information” about the conviction? For exactly these cases the insurance companies exchange information about convictions which relate to insurance fraud, so what is so “confidential” ?? Insurance companies sail VERY close to the wind on data protection all the time, note the comment about the case…. lawyer happy to see damages paid.

      Reply
  • Presumably public bodies will also be liable in future.

    When Dolores McNamara won the lottery, dozens of civil servants checked her details out on the Social Welfare system and were not disciplined.

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  • dont think people are grasping what has happened here. why should anyone have to disclose a conviction for motor insurance, if that conviction is not motoring related. if I got caught shoplifting or drug dealing (not using drugs), or if I was done for murder. neither of these things should have an impact on my motor insurance policy. the only things that should matter on an insurance policy are a persons ability to drive. they have gotten rid of gender discrimination for motor insurance, now its time for the only questions to be asked in relation to motor insurance are motoring questions. like any penalty points, persons age, make model and horse power of vehicle, full licence or learner permit and so on.

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    • It depends what the conviction was for and if it’s relevant to the claim. The point here is how the insurer obtained the info and it appears that they didn’t tell the insured that they had the info in the first place. How ever, I would have thought that previous convictions would be on the public record somewhere.

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    • As a drug dealer your car may be a target for vandals etc. As a law breaker in general, you will be more dishonest and more prone to insurance fraud. Its all about statistics and risk.

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  • FBD will just pass the 15.000 euro on to there customers premiums so its just a win win for the solicitors

    Reply
  • I’d love to know what those insurance companies actually do!! It’s a mystery to me!!

    Reply

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