Stolen Customer Data Results in Ontario's First Certified Privacy Class Action

by Bennett Jones LLP
Contact

Businesses that collect personal information have an added incentive to monitor employees handling customer data – Ontario's first class action arising from the new tort of "intrusion upon seclusion" was certified last week.1

In Evans v Bank of Nova Scotia, the plaintiffs sought to certify a class action against the bank and one of its employees, Richard Wilson, who provided private and confidential information about the bank's customers to third parties in an identity theft scam foiled by Calgary Police.

The Breach

Wilson was employed by the bank as a Mortgage Administration Officer and in that role had access to highly confidential customer information. The bank was alerted to a potential privacy breach involving Wilson by Calgary Police, who had recovered several personal profiles of the bank’s customers in the execution of a search warrant. The profiles identified Wilson as the individual who had accessed and printed the customer profiles and Wilson later confessed to improperly accessing and disseminating that information.

The bank ultimately identified 643 customers whose files were accessed by Wilson during the relevant period (the Notice Group). To date, 138 members of the Notice Group have advised the bank that they have been victims of identity theft and/or fraud. The bank provided individual compensation to every customer who identified losses arising from the data breach (fraudulently obtained credit cards, unauthorized purchases, account takeovers etc.) and offered a complimentary subscription to a credit monitoring and identity theft protection service to all members of the Notice Group.

The Action

The plaintiffs claim damages from the bank and Wilson for among other things, breach of contract, negligence, waiver of tort and the tort of intrusion upon seclusion. The plaintiffs claim that the bank is vicariously liable for the actions of its employee, Wilson.

The court's certification of the intrusion upon seclusion claim is the first of its kind, but likely a harbinger of things to come as the courts are confronted with the fallout from large scale breaches of privacy and data theft.

The tort itself was recently established in the 2012 decision of the Ontario Court of Appeal in Jones v Tsige2 and its elements were described in that case as follows:

The key features of this cause of action are, first, that the defendant’s conduct must be intentional, within which I would include reckless; second that the defendant must have invaded, without lawful justification, the plaintiff’s private affairs or concerns; and third, that a reasonable person would regard the invasion as highly offensive causing distress, humiliation or anguish. However, proof of harm to a recognized economic interest is not an element of the cause of action.

Notwithstanding that the judge did not consider the tort to yet form part of the settled law of Ontario, the claim was certified on the basis that it was not "plain and obvious" that such a claim could not succeed against the bank under a theory of vicarious liability.3

The Importance of Employee Oversight

Although the bank was quick to offer preventative measures for all members of the Notice Group and compensation to the members directly affected, the bank also acknowledged a complete lack of oversight of its employees, including Wilson, with regard to the improper access to personal and financial customer information. Though the bank was not directly involved in the improper access of customer information, the theory of vicarious liability "is strict, and does not require any misconduct on the part of the person who is subject to it."4

Certification does not involve a consideration of the merits of the case and we await the trial outcome (should there be one) to further understand the scope of the tort. As well, it is unclear what damages will be assessed if there is a finding of liability at the merits stage of the proceeding. Nevertheless, the decision provides an added incentive for employers to monitor the activities of their employees in the use of employer technology. As set out in earlier client updates, proactive monitoring can not only diminish the employee's reasonable expectation of privacy over "on the clock" personal use, but can also reduce the likelihood of privacy breaches involving customer information that may now result in class action exposure. Employers should continue to monitor the evolving developments in this area.

Notes

  1. Evans v Bank of Nova Scotia, 2014 ONSC 2135 [Evans].
  2. Jones v Tsige, 2012 ONCA 32
  3. Supra, Evans at para 30.

Supra, Evans at para 23.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Bennett Jones LLP | Attorney Advertising

Written by:

Bennett Jones LLP
Contact
more
less

Bennett Jones LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.