Can A Data Breach Claim Be Settled Out Of Court?

Welcome to our guide, which answers the question ‘Can a data breach claim be settled out of court?’ Data breaches have become a common occurrence in the UK, and they can lead to severe financial and reputational damage to businesses and individuals. When a data breach occurs, those affected often seek compensation for the losses incurred. One way to do this is by filing a lawsuit, but not all data breach claims go to court. In some cases, parties can agree to settle out of court. However, settling a data breach claim out of court can be complex and require careful consideration of various factors.

Can a data breach claim be settled out of court?This guide will provide useful information about settling data breach claims out of court in the UK. We will explore the advantages and disadvantages of settling out of court, the factors to consider before agreeing to a settlement, and the steps involved in settling. We will also discuss the role of solicitors and the importance of seeking legal advice when considering a settlement.

If you have been affected by a data breach and are considering filing a claim, it is essential to understand your legal options fully. Whether you decide to pursue your claim in court or settle out of court, it is crucial to have the guidance of a knowledgeable expert in data breach claims in the UK. Please read this guide in full to learn more about settling data breach claims out of court or contact an advisor for help with your claim.

What Is A Data Breach Claim?

A data breach is an incident in which an individual’s personal data is accessed, disclosed, or processed without authorisation. This can occur through various means, including cyberattacks, accidental disclosures, or insider threats. Data breaches can lead to severe consequences, including financial losses, identity theft, and reputational damage.

If an individual’s personal data has been breached, they may be eligible to claim compensation. To make a personal data breach claim, the individual must demonstrate that they have suffered some form of harm, such as financial losses or emotional distress, resulting from the breach. They must also prove that the data controller, the organisation responsible for safeguarding their data, acted wrongfully, was negligent or breached their duty of care. Data controllers are responsible under the Data Protection Act 2018 to protect personal data. Should they harm a data subject by exposing their data wrongfully, the Data Protection Act allows for eligible victims to seek compensation.

Can A Data Breach Claim Be Settled Out Of Court?

While some data breach claims go to court, others can be settled out of court. The decision to pursue court action depends on various factors, including the strength of the evidence, the potential damages involved, and the likelihood of success. Some data controllers may choose to settle a claim out of court to avoid negative publicity or the costs associated with defending a claim in court.

What Are The Pros And Cons Of Settling A Data Breach Claim Out Of Court?

Now we’ve explained that a data breach claim can settle out of court, we should explain the advantages and disadvantages of settling a data breach claim out of court.

Advantages of settling out of court:

  1. Cost-effective – Settling out of court can be a cost-effective option for both parties, as it avoids the significant costs of going to court.
  2. Time-efficient – Settling out of court can be quicker than going to court, which can take months or even years.
  3. Confidentiality – Settlement agreements can include confidentiality clauses, which can prevent sensitive information from becoming public.
  4. Certainty – Settling out of court provides both parties with a degree of certainty regarding the case’s outcome.

Disadvantages of settling out of court:

  1. Lower compensation – Settlements often result in lower compensation than what may be awarded in court.
  2. No legal precedent – Settling out of court means that no legal precedent is established for similar cases, which may impact future cases.
  3. No appeal – Once a settlement agreement is signed, it is binding, and there might be no opportunity to appeal the decision.
  4. Reputation – Settling out of court may lead to negative publicity and a damaged reputation for the data controller, which may have been avoided by going to court.

Can A Data Breach Claim Be Settled Out Of Court If There Is A Lawyer Involved?

If a lawyer gets involved, a data breach claim can be settled out of court. In fact, having a lawyer represent you can increase the likelihood of reaching a settlement agreement. Lawyers are experienced in negotiating settlements and can advise their clients on the strength of their case and the potential outcomes of going to court.

When a lawyer gets involved, they may negotiate with the data controller or their legal representatives to reach a settlement agreement that provides their client with fair compensation. The lawyer may also advise their client on the advantages and disadvantages of settling out of court, considering the strength of their case, the potential damages involved, and the likelihood of success if the case goes to court.

Settling a data breach claim out of court with the assistance of a lawyer can be a beneficial option for both parties. It can provide a quick and cost-effective resolution to the dispute while avoiding the uncertainty and costs of going to court. However, ensuring that any settlement agreement is fair and provides adequate compensation for the harm suffered is essential.

When Should I Take A Case To Court?

Ultimately, the decision to pursue court action should be based on assessing your case’s merits and considering the advantages and disadvantages of going to court.

To determine whether your case needs to go to court, you should consult with a lawyer who is experienced in data breach claims. They can advise you on the strength of your case and the potential outcomes of going to court. They can also assess the evidence and the damages involved and estimate the potential compensation you may be entitled to.

If your case is strong, and there is a high likelihood of success in court, pursuing court action may be the best option. However, if the evidence is weak, or the potential damages are low, settling out of court may be a more appropriate option. In any case, it is essential to weigh the advantages and disadvantages of going to court carefully.

How To Calculate Compensation

When negotiating an out-of-court settlement for a data breach claim, it is essential to consider the harm suffered in terms of financial loss and emotional distress. This may include any direct financial losses resulting from the breach, such as bank charges or identity theft expenses, as well as any indirect losses, such as loss of earnings or damage to credit ratings.

In terms of emotional distress, damages may be awarded for anxiety, stress, and other psychological harm suffered as a result of the breach. The amount awarded will depend on the severity of the harm and the impact on the individual’s life.

The Judicial College Guidelines provide a range of compensation figures for various types of harm, including psychological harm. These guidelines are regularly updated to reflect changes in the law and provide a useful reference point for calculating damages. We’ve illustrated some of the figures from the Judicial College Guidelines below. However, your settlement would be unique to your case. You can call an advisor if you would like a personalised estimate.

  • Severe psychological injury – £54,830 to £115,730
  • Less severe psychological injury – £1,540 to £5,860
  • Moderately severe psychological injury – £19,070 to £54,830
  • Moderate psychological injury – £5,860 to £19,070

How To Claim Under A No Win No Fee Agreement


One option for pursuing compensation is through a conditional fee agreement (CFA), also known as a No Win No Fee arrangement. Under a CFA, a lawyer will take on a case on the understanding that they will not receive payment unless the claim is successful. If the claim is successful, the lawyer will receive a percentage of the compensation awarded.

The process of claiming compensation under a CFA typically involves an initial assessment by the lawyer to determine the strength of the case. If the case is deemed viable, the lawyer will enter into a CFA agreement with the claimant. Under the Conditional Fee Agreements Order 2013, any fees charged by the lawyer must be reasonable and proportionate to the amount of compensation awarded.

Start Your Claim

If you believe you have been the victim of a data breach and have suffered financial loss or emotional distress, it’s essential to seek legal advice as soon as possible. We work with a panel of experienced data breach solicitors who operate under a No Win No Fee agreement, ensuring that you can pursue your claim with peace of mind, knowing that you will not be required to pay any upfront costs.  Our expert advisors are available to provide a free case check and guide you through the process of making a data breach claim.

Can A Data Breach Claim Be Settled Out Of Court? Find Out More

Data Breaches And Fines – Insight from the UK Information Commissioner’s Office (ICO).

How Do I Know If I Have A Valid Data Breach Claim? – Check your eligibility.

Guidance For Individuals – You can find out more about data breach claims here.

How To Use A Data Breach Compensation Calculator – Calculate your compensation.

What To Do If You’re Affected By A Data Breach – UK Government advice. 

No Win No Fee Data Breach Claims Explained – Finally, learn more about No Win No Fee Agreements.