Law

Legal disputes over data theft rising

August 6th, 2013

The number of High Court legal disputes over the data theft from businesses has reached a record high, as the popularity of cloud storage services making it easier for confidential data to be stolen.

According to commercial law firm EMW, last year there was a growth by 58 percent of legal disputes taken to the High Court, with 167 cases during 2012, up from 45 in 2010 and 106 in 2011.

The majority of these cases are civil claims against former employees launched by businesses, with the aim of preventing them from taking confidential data from company database.

Popularity of cloud storage systems such as DropBox has made it easier for employees to steal information outside the business. This is one of the reasons for the increase in businesses taking action against employees, said Mark Finn, principal at EMW.

Finn said “The boom in cloud computing and the widespread use of services like Dropbox have made copying a large database something that can be accomplished by virtually anyone in seconds”.

Finn added that many of the cases which have appeared in court have concerned financial services firms, estate agents and recruitment businesses which have had databases of contacts taken over to rival firms by their employees. This has become more of a problem as the tough economic climate of the past years has meant that more staff has been moving from one company to another.

“Employment contracts are generally very clear on this issue – all know-how, databases and other forms of intellectual property developed by staff during their work time is the property of the employer. Occasionally, disgruntled staff may misguidedly feel they have a ‘moral right’ to take data they have developed. This simply is not the case” he said.

“As the economy improves and businesses increasingly see employees leave to join rivals, they will have no choice but to undertake potentially lengthy and costly legal action to protect their interests”.

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