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23 October 2013 0 Comments
Posted in Employment, Opinion

Breaches of Data Protection Act – compensation for distress

Posted by , Partner

In what is believed to be the first case of its kind, Halliday v Creation Consumer Finance Limited is a Court of Appeal case which has awarded compensation for distress caused by breach of the Data Protection Act. The case involved a consumer transaction but it is potentially relevant in an employment contract because the same principles apply to any organisations which process personal data, which of course includes employers.

The Claimant bought a television under a credit agreement with the Defendant, which was discharged by the County Court by a consent order after the Claimant brought a claim for breaches of the Data Protection Act. The Defendant was ordered to pay the Claimant £1,000 plus £500 cost and the Defendant agreed to delete all data relating to the Claimant and ensure that all third parties who held the data did the same.

When the Defendant was unable to pay the money which it owed to the Claimant into his bank account it paid him the money privately and sought to recover the money from the bank who refused to pay it back. The Defendant then tried to recover the money from the Claimant in new proceedings, in the process of which the Claimant discovered the Defendant had forwarded data to a credit referencing agency incorrectly showing that he owed the Defendant £1,500 and was in excess of his credit limit.

The Claimant then brought a counter claim against the Defendant alleging new breaches of the Data Protection Act and claiming compensation for damage to reputation and for distress. Section 13 (2) of the Data Protection Act provides that individuals can claim compensation for distress caused by breaches of the DPA provided they have suffered damage as a result.

The County Court had awarded nominal damages of £1 on the basis that there was insufficient evidence of damage to the Claimant’s reputation or credit to award substantial damages. The Claimant appealed to the Court of Appeal who upheld the appeal and looked at whether he was entitled to damaged for distress. It held that there was evidence he had suffered distress and awarded him the sum of £750.

This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.

For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.

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