Eduard Korsinsky
In today’s hyper-connected digital environment, the risk of data breaches is greater than ever. From global tech giants to small medical clinics, no organization is entirely safe from cyberattacks. When a breach occurs, it often exposes sensitive personal information such as Social Security numbers, medical records, banking details, and login credentials, placing victims at risk of identity theft, financial fraud, and long-term privacy violations.
Most commonly exposed data types in breaches, ranked by sensitivity and potential impact.
If you’ve received notice that your personal data has been compromised, you may be asking:
Can I sue the company responsible for the data breach?
The short answer is yes, but your ability to do so depends on multiple legal and factual factors.
This guide will walk you through when you can sue after a data breach, the legal grounds for lawsuits, the types of compensation you can seek, steps to protect your rights, real-world case examples, and how to decide between filing individually or joining a class action. It will also cover common defenses companies use, how long you have to sue, and how a lawyer can help maximize your recovery.
The Rise of Data Breaches in the U.S.
Data breaches have been steadily increasing over the past decade, not just in frequency but also in scale and severity.
U.S. Data Breach Trends (2010–2024)
According to the Identity Theft Resource Center, more than 3,200 breaches were reported in a single year, compromising over 350 million records. Cybercriminals frequently target organizations with weak cybersecurity practices, often exploiting outdated or unpatched software, poor password management, and inadequate network segmentation.
The consequences for victims can be severe. Many experience identity theft, where stolen data is used to open fraudulent accounts or take out loans in their names. Others suffer significant financial losses from unauthorized charges, drained accounts, and long-term credit damage. On top of the financial harm, there is the emotional toll — the stress, anxiety, and loss of trust that comes with knowing your personal information is in the wrong hands.
Annual trends in reported U.S. data breaches and records exposed, 2010–2024 (Statista)
When Can You Legally Sue for a Data Breach?
Your right to sue depends largely on how the breach occurred and whether the incident violated laws, contracts, or duties of care.
- One of the most common legal claims is negligence. A company can be considered negligent if it fails to take reasonable measures to protect customer data. For example, if a business knowingly uses outdated software with known vulnerabilities, stores sensitive data without encryption, or fails to provide employees with adequate cybersecurity training, it may be liable. If it is proven that the breach occurred because of such failures, victims can have a strong case.
- Another potential claim is a violation of privacy laws. Many states have enacted laws to protect residents from data misuse. For instance, the California Consumer Privacy Act (CCPA) allows residents to sue for statutory damages if their data is exposed, while the Illinois Biometric Information Privacy Act (BIPA) provides protections against unauthorized collection of biometric identifiers. Under these statutes, victims may not even need to prove financial harm to recover compensation.
- A third possible legal avenue is breach of contract. If a company’s privacy policy or service agreement includes promises about safeguarding personal data and the company fails to uphold these promises, victims may have grounds for a lawsuit. Proving breach of contract generally requires showing that the data was compromised, that the victim suffered losses or harm, and that there is a direct link between the company’s failure and those losses.
Types of Compensation You Can Seek
If your lawsuit is successful, or if you join a settlement, the compensation available can take several forms. Actual damages are the most straightforward, covering direct financial losses such as fraudulent charges, costs for identity theft repair services, or wages lost due to time spent resolving breach-related issues.
Courts may also award damages for emotional distress, particularly in cases involving exposure of sensitive information like medical records or financial account details. In more serious cases, punitive damages may be imposed as a form of punishment when a company’s conduct is found to be especially reckless or malicious.
In California, Illinois, New Jersey, Massachusetts, and Maryland, statutory damages are available under specific privacy laws like the CCPA or BIPA, even if you cannot prove actual harm. These fixed amounts are meant to deter violations and simplify the legal process for victims.
Steps to Take if Your Data Was Compromised
If you suspect or know that your data has been exposed, the first step is to confirm whether you were affected. Companies are required to send official breach notifications, but you can also check independently through resources like Have I Been Pwned for email-related breaches or the HHS Breach Portal for healthcare-related incidents.
Once confirmed, report the breach to the Federal Trade Commission (FTC) and your state’s Attorney General. This creates an official record that can be useful in legal proceedings.
It is also essential to protect your identity immediately. Placing a fraud alert or credit freeze with the major credit bureaus — Equifax, Experian, and TransUnion can help prevent further misuse of your data. Monitoring bank statements, credit reports, and even social media accounts for suspicious activity is equally important.
Finally, keep detailed records. Save breach notification letters, screenshots of suspicious activity, receipts for any expenses incurred, and a log of the time you spend resolving the situation. This documentation will be crucial for proving damages in court.
Real-Life Data Breach Lawsuits
These high-profile events show how victims have held organizations accountable—often securing significant settlements and setting legal precedents.
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- Yahoo (2013–2016)
- A series of breaches affected 3 billion accounts, exposing emails, birthdates, and security questions. The company delayed disclosure until 2016, leading to lawsuits. Yahoo ultimately agreed to a $117.5 million settlement in 2019.
- Equifax (2017)
- An unpatched Apache Struts vulnerability allowed attackers to steal data from 147 million Americans, including Social Security numbers. In 2019, Equifax reached a $700 million settlement with regulators and victims.
- SolarWinds (2020)
- A supply chain attack on the Orion software platform, attributed to Russian state-backed hackers, compromised thousands of organizations, including U.S. agencies. Investors filed securities fraud lawsuits alleging the company misrepresented its cybersecurity safeguards.
- 23andMe (2023)
- Credential stuffing attacks exposed sensitive genetic and ancestry data of millions of users. Multiple class-action lawsuits allege the company failed to adequately protect consumer DNA information.
- Yahoo (2013–2016)
Should You File Individually or Join a Class Action?
Victims often face a choice between filing an individual lawsuit or joining a class action. An individual lawsuit can lead to higher compensation if the damages are substantial and well-documented, but it is usually more time-consuming and expensive. A class action consolidates many similar claims into one case, reducing costs and making it easier to proceed, although individual payouts may be smaller.
Common Defenses Companies Use in Data Breach Lawsuits
Companies rarely admit liability without a fight. They may argue that they took reasonable steps to protect data, that the breach caused no measurable harm, or that a third party such as a hacker or vendor was responsible. Some invoke “force majeure” defenses, claiming the breach was caused by unforeseeable events beyond their control, such as state-sponsored cyberattacks. Anticipating these arguments allows victims and their attorneys to prepare stronger counterevidence.
How Long Do You Have to Sue?
The time limit for filing a lawsuit, known as the statute of limitations, varies by state and by the type of claim. In California, you typically have two to three years to file, depending on whether the claim is under negligence or privacy law. New York generally allows three years for negligence claims, while Illinois provides up to five years for BIPA violations. Missing the deadline can mean losing your right to sue entirely, which is why contacting a lawyer promptly after a breach is critical.
How a Lawyer Can Help You Win
An experienced attorney from a trusted data breach law firm can make the difference between a dismissed case and a successful settlement. They can conduct forensic analysis to determine the cause of the breach, trace the stolen data to demonstrate how it harmed you, and work with cybersecurity experts to show that the company’s safeguards were inadequate. Lawyers also handle negotiations, whether for individual settlements or in the context of a class action, and ensure that you seek the maximum possible damages.
Final Takeaway
Data breaches can be overwhelming, but victims are far from powerless. The law provides clear avenues to hold negligent companies accountable and to recover compensation for the losses you suffer. Acting quickly is critical secure your accounts, preserve all evidence, and consult with an experienced attorney. Even if you have not yet experienced financial harm, stolen data can surface months or even years later, making proactive protection essential to safeguarding your identity and rights.
