“NO ORDINARY LITIGANT WOULD INCUR COSTS APPROACHING £50,000 IN ORDER TO RECOVER £3,000”: DATA BREACH CASE TRANSFERRED FROM HIGH COURT TO SMALL CLAIMS TRACK

In Cleary v Marston (Holdings) Ltd [2021] EWHC 3809 (QB) Mr Justice Nicklin ordered a transfer of a data breach case from the High Court to the small claims track in the county court.

 

It is important that claimants (and those advising them) do not pursue claims that add little but yet have the potential to make the case more complicated and lead to increased costs ultimately to resolve what in many cases will be a straightforward claim.”

 

THE CASE

The claimant was seeking damages for breach of date protection legislation. An email sent by an employee of the defendant was accidentally sent to someone else. The facts were not in dispute.    The defendant’s case was that the recipient of the email had not read it and there was no harm. Whether the email had been read was the only factual dispute in the case.

PROCEEDINGS IN THE HIGH COURT

The claimant issued proceedings in the High Court.  The Notice of Issue was accompanied by a notice of funding stating that the CFA allowed for a success fee.  The claimant also took out an ATE policy.  The pleaded value of the claim was £3,000.  The claimant’s costs budget sought a budget of £46,908.

THE CMC – WHY WAS THIS MATTER ISSUED IN THE HIGH COURT?

The judge ordered that a CCMC be held and that the claimant file evidence explaining why the claim was issued in the High Court and explaining why certain declarations were being sought.

THE JUDGE’S DECISION – THIS MATTER GOES TO THE SMALL CLAIMS TRACK

The judge held that the case had been presented in an unnecessarily complicated way.  The claim for declarations was not necessary and the nature of the dispute was suitable for resolution in the small claims track.

    1. The final thing to note before turning to the question of transfer today is the cost budget that has been filed by the Claimant, dated 16 September 2021. The Claimant’s solicitors’ estimate of the costs likely to be incurred in bringing this case to trial is £46,908.
    1. The question of low-value data protection claims and where they ought to be tried has recently been dealt with by several of the Masters and, most recently, by Master Thornett in a decision that he handed down on 16 November 2021 in Johnson -v- Eastlight Community Homes Ltd [2021] EWHC 3069 (QB). As Ms Walker-Parr has made clear today, it is fair to say that there are differences in the facts between the Johnson case and this case. Most importantly, as noted in the Master’s decision in paragraph 6.1, the information that was the subject of the data breach in that claim was not of an obviously sensitive nature in itself. That is a point of distinction between this and Mr Cleary’s claim.
    1. The Master went through a number of the issues that fall to be considered in a detailed and careful judgment about the proper place for a claim brought for what has become known as low-value data breach claims. That term is not meant to, in any way, diminish the importance of the claim to the individual litigant. It merely marks them out as being different from different types of cases where there has been a substantial data breach, sometimes as a result of hacking, that can lead to a very large release of data affecting a significant number of individuals.
    1. Master Thornett set out his conclusions from paragraph 24 onwards. He drew attention to the definition of a “media and communications claim” in CPR 53.1(2) as one that satisfies the requirements of subparagraphs (3) and (4). Subparagraph (3) does indeed include claims for misuse of private information and data protection. However, as the Master correctly noted, a claim in respect of such causes of action is only to be issued in the Media & Communications List if it is a “High Court claim”. That is to be contrasted with claims for defamation, which must be issued in the Media & Communications List of the High Court.
    1. On a proper reading of CPR 53.1, therefore, there exists a category of non-defamation media and communications claims that are capable of being brought and fairly tried in the County Court. Typically, those will be claims where the damages sought are relatively low and the claim does not have any particular complexity. Such claims ought properly to be commenced in the County Court. It will be a matter for the District Judge in each case, but there is no reason why straightforward claims cannot be dealt with on the Small Claims Track.
    1. I need to address the point raised by Ms Knight in her witness statement about the jurisdiction of the County Court to hear breach of confidence claims. It is right that the County Court does not have original jurisdiction to hear claims for breach of confidence. If a claim is to be brought for breach of confidence, then it will have to be started in the High Court. If started in the High Court, then, depending on the nature of the claim, it may be suitable to be brought in the Media & Communications List. Matters do not end there because the High Court can, nevertheless, transfer a breach of confidence claim to the County Court.
    1. Those who are advising claimants who want to bring data breach claims need to think carefully about the claims that are included. There can be and often are several overlapping claims: breach of confidence, misuse of private information and breach of data protection legislation. In many cases, this will simply represent three different ways of characterising what is essentially the same complaint.
    1. In accordance with the overriding objective, and also in the best interests of the client, it is necessary to consider whether a claim in respect of all three causes of action needs to be pursued. If there is a straightforward claim, for example for a data protection breach, then it may be in the best interests of the client and the simplicity of the litigation to concentrate on only that claim. In straightforward cases, like this one, there may be no real dispute about the data breach. If so, little of any substance or real value is likely to be gained by complicating the claim by bringing additional claims for misuse of private information or breach of confidence.
    1. In fact, in the classic data breach case, of which this is as good as example as many, where, as a result of human error, information being provided to a third party who should not have received it, data protection offers a straightforward remedy, that avoids getting into areas of whether the Defendant can be said to have “misused” the relevant personal information.
    1. It is important that claimants (and those advising them) do not pursue claims that add little but yet have the potential to make the case more complicated and lead to increased costs ultimately to resolve what in many cases will be a straightforward claim.
    1. I then come on to the question about remedies. I made a direction that the Claimant’s solicitors should explain why the Claimant was seeking a declaration. Declarations are not usually remedies that are sought in claims like this. There may well be examples in the past of the Court being willing to grant a declaration, but I have yet to have advanced to me a coherent argument why such remedies should be sought or granted by the Court in cases like this. Declarations are more usually found in claims in Chancery Division, typically property cases, where there is a need to establish clearly some legal right or entitlement. Often, that is because the declaration will have some significance beyond the immediate parties the litigation.
    1. In most other forms of civil litigation, the declaration that a claimant has been, for want of a better word, ‘wronged’, is provided by the Court’s judgment on his/her claim and the Court’s order flowing from that judgment. If the litigant wants something tangible to point to, to indicate that his legal rights have been vindicated by the Court, then s/he need go no further than the court’s judgment and order on his claim. A formal ‘declaration’ supplies nothing more than the Court’s decision. A claim for a declaration in a media and communications claim is unusual and should not be included unless, exceptionally, there is a justification for one.
    1. I cannot see the value of the declaration sought by the Claimant in this case. If it is right that the Defendant has misused the private information of the Claimant and/or has processed his private information or personal data in breach of data protection, then that will become apparent in the court’s ultimate judgment and decision and order that is granted. A declaration will add nothing of value beyond this. This was a matter that troubled Master Thornett in the Johnson case and, like him, I cannot see the value of such a remedy in a claim of this type.
    1. I turn then to the alleged complexity of the claim. As to factual complexity, I have already identified in this claim, there is very little by way of factual dispute. It may be that, now the Defendant has seen the email from the third party to whom the letter concerning Mr Cleary was disclosed, it will adjust its stance. But those are matters of limited compass and, if they remain in dispute, can be fairly resolved in the County Court. As to legal complexity, it is true, as Ms Knight observes, that there can be claims which raise elements of complexity in this area of the law. Data protection is not the most straightforward of areas of the law. So too, misuse of private information and breach of confidence. But that is not to say that every claim will be legally complicated, and I have no doubt that the judges of the County Court, both District and Circuit judges, are well able to wrestle with those issues of law that arise. It is to be remembered that District Judges, in particular, have an extensive jurisdiction over civil claims which means they have to be ready and able to deal with claims that raise all manner of legal points, some of which may have elements of complexity. But they are experienced judges who are well able and well used to deciding legal points that arise in the context of the litigation.
    1. Stepping back, this is a very straightforward claim. The Defendant is not really raising any defence to the Claimant’s fundamental claim that it should not have disclosed the letter relating to Mr Cleary to the other employee. I cannot see in this case there is likely to be any real dispute as to the applicable law but, if there is, it will be a matter that is capable of being dealt with fairly by the County Court.
    1. In fairness, neither party is arguing against transfer. The real issue on transfer is whether I should also direct that the claim should be allocated to the small claims track or leave the decision on allocation to the District Judge once the claim has been transferred. I have come to the clear conclusion, having now looked at this case in some detail, that it can fairly be tried on the small claims track and so should be allocated there. The factors that indicate that are that there is limited factual dispute and the legal issues that arise for decision in this case are not complex and do not require a specialist judge. Most importantly, on allocation, this is a claim of a value which would usually lead to it being allocated to the small claims track. In other words, it would require a justification to allocate it to a different track. I do not consider that there is any justification for allocating it to a track other than the small claims track, and none has been advanced.
    1. Ms Walker-Parr did make a wider submission that the only way of ensuring access to justice for a person like Mr Cleary was to enable him to bring a claim in circumstances where his solicitors were able to recover their costs and ATE premiums. I accept that if the Court routinely allocates low-value data breach claims to the County Court then it may mean that people in the circumstances of Mr Cleary will be unable to find lawyers that are willing to represent them and, without ATE insurance, they may be deterred from bringing a civil claim because of the risk of an adverse costs order. Those submissions raise wider policy issues, but in my judgment, they cannot ultimately affect the decision as to the proper allocation of Mr Cleary’s claim.
    1. In my judgment, the circumstances and nature of the Claimant’s claim does not justify being allocated anywhere other than the County Court and on the small claims track. That is, in one sense, good news for Mr Cleary. Unless he is guilty of unreasonable conduct, in the small claims jurisdiction he will not be exposed to the risk of any adverse order for costs. That is one of the important safeguards available in the County Court which promotes access to justice. It means that a citizen can bring a small claim before the court and receive an adjudication upon it. If the claim does not succeed, providing s/he has not acted unreasonably, s/he will not be exposed to an adverse order for the defendant’s costs (save in very limited respects provided under the small claims track).
    1. As I indicated to Ms Walker-Parr during the course of argument, no ordinary litigant would incur costs approaching £50,000 in order to recover £3,000. The likely irrecoverable costs would almost certainly exceed the sum that Mr Cleary was claiming in damages. In that respect, litigation of his claim in the High Court makes no sense for Mr Cleary. The best place for the resolution of his claim is the Small Claims Track of the County Court. If he is successful in his claim, the court will award him fair and just compensation.
  1. In those circumstances, the order that I will make today is to transfer the proceedings to Mr Cleary’s home county court which I believe is in Manchester. It will be allocated to the small claims track. One benefit of allocating it now is that, once it is received by Manchester, the claim can move swiftly to an ultimate hearing if it is not resolved in the meantime.