Supermarket giant Morrisons faces a potentially “vast” compensation payout over a leak of staff data on the internet despite being innocent of any wrongdoing, leading judges have heard.
A lawyer representing the company told the Court of Appeal it is challenging a ruling that it is “vicariously liable” for the “criminal online disclosure of significant quantities of payroll data effected by a rogue employee”.
Anya Proops QC said at a hearing in London on Tuesday - in the latest round of the first data leak class action in the UK - that if the decision of a High Court judge last year was allowed to stand Morrisons was exposed to “compensation claims on a potentially vast scale”.
Litigation was launched after a security breach in 2014 when Andrew Skelton, a senior internal auditor at the retailer’s Bradford headquarters, leaked the payroll data of around 100,000 employees - including names, addresses, bank account details and salaries.
In July 2015 Skelton was found guilty at Bradford Crown Court of fraud, securing unauthorised access to computer material and disclosing personal data, and was jailed for eight years.
A group of 5,518 former and current employees are seeking compensation for the distress caused in a case with potential implications for every individual and business in the country.
The supermarket giant said it could not be held directly or vicariously liable for the criminal misuse of the data, and that any other conclusion would be grossly unjust.
But Mr Justice Langstaff found in December that vicarious liability had been established.
Ms Proops told Master of the Rolls Sir Terence Etherton, Lord Justice Bean and Lord Justice Flaux that the ruling was made despite Morrisons “being entirely innocent of any material wrongdoing”.
The QC said that Morrisons, although “entirely blameless”, was potentially exposed to compensation claims not only in respect of the 5,518 but from all of the individuals affected by the criminal disclosure.
She said there was no dispute “that Skelton effected his criminal disclosure as an act of vengeance and specifically in order to damage Morrisons’ interests”.
In a statement issued before the latest round of the dispute over liability, Nick McAleenan, a partner and data privacy law specialist at JMW Solicitors, who is representing the claimants, described it as a “classic David and Goliath case”.
He said Morrisons was seeking “to reverse the High Court’s findings of vicarious liability made in the claimants’ favour, thereby denying the claimants any compensation whatsoever for the considerable distress and inconvenience caused by Mr Skelton’s actions”.
He said: “It cannot be right that there is no legal recourse where employee information has been handed to one of the largest companies in the UK and then leaked on such a large scale, in such circumstances.”