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Supreme Court to rule on data breach compensation claims

The Supreme Court is set to conclude a hearing today that could impact businesses facing data protection claims for emotional distress or anxiety.

  • The Supreme Court is deciding if compensation for data breaches requires proof of actual harm.
  • The case originated from a 2019 data breach involving 432 police officers and Paymaster.
  • The Court of Appeal previously ruled there is no minimum 'threshold of seriousness' for such claims.

The Supreme Court is scheduled to conclude a hearing today, 8 October 2026, which will determine if compensation for emotional distress or anxiety from data breaches can be awarded without needing to prove actual harm occurred. The outcome could lead to an increase in data protection claims against businesses.

The case was initiated by 432 current and former police officers from Sussex Police against Paymaster, the force's pensions administrator. This followed a 2019 data breach where annual pension benefit statements, containing sensitive data such as names, National Insurance numbers, and salaries, were mistakenly sent to outdated addresses for approximately 450 officers.

The Supreme Court is tasked with deciding whether a threshold of seriousness should exist for data privacy claims. The Court of Appeal previously ruled against such a threshold, a decision that Paymaster, trading under its parent company Equiniti, is challenging.

In 2024, a High Court judge dismissed most claims, requiring proof that the pension statement was opened and read by a third party. However, the Court of Appeal overturned this in 2025, ruling that sending data to the wrong address could be grounds for a claim without proof of it being read by a third party.

Why this matters: If the Supreme Court refuses Paymaster's appeal, businesses could face more claims for non-material damage, such as distress or anxiety, without needing proof of actual harm.

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