As the number and severity of data breaches have increased in recent years, there has been a corresponding rise in data breach litigation in courts across the United States. After any given data breach, lawsuits are filed and attorneys begin preparing for multiyear dogfights in the courtroom. While there is certainly value in litigating these claims (for example, by helping draw Congressional and regulatory attention to the issue of cybersecurity), alternative approaches, such as arbitration, offer many benefits unavailable in the courtroom setting.

The primary drawbacks of litigation have always been time, cost and uncertainty. While the time and cost factors associated with data breach litigation may vary, the legal complexity of most data breach situations — which require relegating legal fault and then aggregating sufficient proof of liability — means that it will likely take millions of dollars and several years to reach resolution. And, during this protracted time period, the uncertainty of the ultimate litigation outcome negatively impacts plaintiffs and defendants. To help avoid these drawbacks, all parties should begin considering arbitration as an alternative to litigation. Data breach arbitration has the potential to resolve complex legal issues, while saving the parties time and money. A few of the potential advantages of arbitration in data breach litigation are discussed below.

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