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Data Protection Disputes to Soar Over Next Five Years

Experts are urging organizations to brace themselves for a surge in data protection-related legal disputes over the next five years, driven in part by incoming European laws.

The School of International Arbitration at London’s Queen Mary University and Pinsent Masons law firm teamed up to interview over 340 legal experts from organizations globally turning over $500 million or more annually.

Some 80% of respondents said they thought the number of data protection and privacy related disputes are “very” or “somewhat” likely to rise by 2021, while 79% thought the same about security breaches.

This would make data protection and security issues the second biggest cause of legal disputes after intellectual property.

Data protection issues accounted for only 13% of TMT disputes over the past five years, according to the research.

“The reputational and financial effects of such issues can have hugely detrimental consequences for an organization,” said Pinsent Mason partner, David McIlwaine. 

“Clearly, the twin issues are concerning in-house lawyers. This would suggest that in order to predict and mitigate real business risk, organizations should now be setting and testing their approach to data protection or data security compromise, including, potentially, the creation of a crisis protocol."  

The research also confirmed what many in the cybersecurity industry know already—that insider risk accounts for the majority of data breach-related disputes, rather than malicious third parties or supplier-side issues.

McIlwaine added that the forthcoming European General Data Protection Regulation would usher in a new wave of litigation against data controllers and processors, potentially driving demand for arbitrators with specialist experience in the area.

Queen Mary professor, Loukas Mistelis, argued that TMT disputes are on the rise, whatever sector your organization is in.

Some 23% of businesses have been involved in at least 20 TMT disputes over the past five years. And a third (34%) of survey respondents said their largest dispute cost over $100 million.

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