Canada: Protect Your Organization In The Event Of A Data Breach

Last Updated: November 10 2016
Article by Graham McLennan and Stuart W. Chambers

One of the fastest growing areas of class actions in North America involves data breaches. Lost or stolen data from organizations is now, unfortunately, a regular occurrence. Most businesses and other organizations now have vast amounts of stored electronic data, and typically, that data will include confidential or private information about individuals. Accordingly, the consequences of a data breach can be very serious.

When such a breach occurs it will frequently lead (often within a very short period of time) to the commencement of a class action against the organization which was charged with maintaining the data. Even absent proof of harm being suffered by any of the individuals whose data was released, the sheer size of the group of individuals can, if the matter is certified as a class proceeding, result in enormous potential liability.

The appropriate technical responses to a data breach are obviously of critical importance, and it is for the organization's IT professionals to prepare those responses. However, the organizations' lawyers should be ready to provide the necessary legal responses to the class action that will almost inevitably follow a data breach. If appropriate and timely, such responses can preempt, perhaps defeat, and certainly mitigate the organization's exposure.

Although each case must be considered individually, certain prudent steps are generally recommended. These typically include:

  • Providing immediate notice to the Office of the Information and Privacy Commissioner of Alberta (or the equivalent privacy commissioner of the relevant jurisdiction).
  • Issuing a press release and/or publishing notices alerting the potentially affected group of individuals in all relevant jurisdictions, providing details of the scope of potentially affected information, and providing a point of contact for further information (which will generally be or include the organization's website).
  • If possible, directly contacting potentially affected individuals, for example, by email. Such e-mail should provide applicable details as to what information was at risk and the timeframe in which affected information was breached. In addition, details as to the steps that have been taken or are being taken to remedy the breach and prevent further occurrences, and any offers to assist from the organization, should be outlined.
  • Providing updates, and posting all updates to the website, as further information emerges and as greater detail or specificity becomes available.
  • Offering services such as credit monitoring or identity theft insurance at the organization's cost (although the nature of the information released, the volume of potentially affected customers, and the risks which they face must be considered in each instance).

If the above steps are implemented in a timely fashion, then the organization is well-positioned to respond to any class action because:

  • The organization may argue that the process which it has already set up to address complaints is preferable to the civil litigation procedures of a class action. One of the prerequisites to certification of a proposed class action (the process whereby a Court accepts that the lawsuit may be brought on behalf of an identifiable group of complainants, not just the named Plaintiff) is that a class action be the "preferable procedure" to resolve the dispute;
  • Negotiation of a resolution, potentially making use of the steps already taken by the organization, will likely be much easier;
  • Some wind has been taken out of the sails of the lawyers for the class, because the damages suffered by class members (if any) have been mitigated; and
  • Class counsel's fees (a significant feature of many of these claims and their resolution) will likely be less.

A recent Ontario Superior Court of Justice decision, approving the substantive elements of a settlement in relation to Canadian customers of Home Depot affected by that organization's 2014 data breach, is illustrative. In that case, Home Depot had reacted promptly and proactively to notify the relevant privacy commissioners of the breach, as well as publishing notices and issuing emails directly to Canadian customers. In its communications Home Depot apologized, explained that the source of the breach had been eliminated, and offered various assurances to affected customers including free credit monitoring and identity theft insurance. There was no evidence of any actual harm suffered by any class member.

When a class action was then commenced in relation to the breach, a negotiated settlement followed which required Home Depot to pay for further credit monitoring and identity theft insurance services, as well as notice and settlement administration costs, honouraria to the class representatives, and class counsel's legal fees.

Settlements of class actions are approved by the Court. In the Home Depot case, the settlement was reviewed by Justice Perell. His comments suggest that he wondered whether, given Home Depot's comprehensive response to the data breach, a class action was even required. Nonetheless, as the parties had settled, he was obliged to consider whether to approve the settlement. Justice Perell did so, but with a reduction in the fees payable to class counsel from the $406,000 sought to $105,000 and disallowing any honouraria to the class representatives. Given Justice Perell's comments, Home Depot may have been successful in simply opposing the certification of the class action on the basis that the entire action was unnecessary. Home Depot had, it appears, responded appropriately to both the data breach, and any damages which may have been suffered by its customers (the members of the proposed class).

In conclusion, organizations which have a data breach occur should take immediate steps, in consultation with their legal counsel, to notify the appropriate authorities and any impacted individuals. Further, those organizations should also consider taking steps to mitigate their exposure to class proceedings.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Graham McLennan
Stuart W. Chambers
Events from this Firm
13 Sep 2017, Webinar, Calgary, Canada

Accommodation in the workplace is not a new concept. However, the needs of employees that employers are being asked to accommodate are continuing to evolve and change. In addition, the expansion of human rights legislation to add additional types of expression and personal characteristics which will require accommodation is on the horizon.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.