Precedent-Setting Result Achieved in Privacy Breach Class Action

A privacy breach class action recently settled by Wagners is the first of its kind of settlement in Canada.

The class action, filed in 2012, alleged that an employee of a Nova Scotia hospital was vicariously liable for its employee’s intentional intrusion into the privacy of patients’ records.

A clerk at the hospital in question had allegedly accessed the records of several hundred patients without needing to do so to perform her job, in breach of the hospital’s privacy policies. The employee was subsequently terminated.

The claim was based on a relatively new tort of intrusion upon seclusion, a tort that has come to prominence in light of the increasing availability of private information in electronic format. The Ontario Court of Appeal is the highest court in Canada to date to articulate the elements of the tort.

Although the tort of intrusion upon seclusion has been considered in cases where the “snooper” was directly sued, and although other types of privacy breach class actions have settled, this is the first settlement of a claim that an employer is vicariously liable for the “snooper’s” actions. (Being an out-of-court settlement, no admission of liability was made by the defendant.)

Each living person whose records were inappropriately accessed received $1,000.

Given the heavy reliance of institutions like hospitals, banks, and retailers on electronic information about their patients and clients, it’s likely that future claims of vicarious liability for intentional privacy breaches will be brought against these institutions.

What remains to be seen is whether any of these claims will be litigated through to a conclusion, with a court determining whether, and in what circumstances, an employer will be held liable for the intentional privacy breaches carried out by a so-called “rogue” employee.

Unless and until a higher court pronounces on this issue, parties involved in these types of legal actions may look to the recent settlement obtained by Wagners for guidance on a reasonable outcome of this type of action.

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