For London businesses, digital innovation has become both a lifeline and a liability. From fintech start-ups in Shoreditch to global banks in Canary Wharf, reliance on data is now fundamental to operations. But with that reliance comes vulnerability, data breaches and cyber-attacks are no longer rare technical issues, they are routine business risks with legal and reputational stakes that are escalating fast.

A Rising Tide of Disputes

The Information Commissioner’s Office has stepped up enforcement, with large fines issued against firms failing to safeguard customer information. At the same time, group litigation has surged. Claimant firms are increasingly bringing collective actions on behalf of thousands of affected customers. High-profile examples, such as the British Airways and Marriott cases, highlight how quickly a breach can escalate into mass claims.

London’s courts have become a global hub for these disputes, not least because the UK’s legal system is perceived as both claimant-friendly and commercially sophisticated. The result, businesses of all sizes, not just multi-nationals, are facing heightened exposure.

Why Is Litigation Growing

Three key factors make privacy disputes more common and more complex:

• Regulatory Pressure – The UK GDPR and Data Protection Act 2018 create strict obligations. Failure to comply, even inadvertently, can attract penalties and investigations that often trigger parallel civil claims.
• Public Awareness – Customers are more aware of their rights. A single breach can quickly lead to reputational backlash and co-ordinated legal action.
• Litigation Funding – The rise of litigation funders has made collective actions viable, increasing the likelihood that claims will proceed to court.

The Costs Beyond the Fine

It is tempting to see a data breach as a regulatory issue alone. Yet litigation risk often exceeds the immediate cost of ICO fines. Defending legal actions, managing insurers, and negotiating settlements can drag on for years. Furthermore, the reputational fallout, loss of consumer trust, shareholder disputes, and scrutiny from partners, can dwarf the financial pain.

For SME’s, the risk can be enormous. A single cyber-incident can absorb management focus, drain resources, and erode competitive edge. Larger corporates, face the compounding challenge of cross-border exposure, as a London-based breach can trigger proceedings across multiple jurisdictions.

ADR on the Rise

Interestingly, businesses are increasingly exploring arbitration and alternative dispute resolution (ADR) to manage cyber-related conflicts, particularly in B2B contexts. Confidentiality, speed, and specialist expertise make these routes attractive compared to public court battles.

Contractual drafting is shifting accordingly. Cyber-risk clauses, indemnities, and dispute resolution provisions are being tightened. Many London companies are now embedding mediation or arbitration as the default mechanism for supplier and partner disputes linked to IT or data handling.

What London Businesses Should Do

To navigate this environment, businesses should consider a three-pronged approach:

• Prevention – Invest in cyber-security infrastructure, conduct regular audits, and ensure data protection compliance is embedded across operations. The cost of preparation is invariably lower than the cost of litigation.
• Plan for Disputes – Review contracts to ensure robust cyber-risk allocation and consider ADR clauses. Pre-agreed pathways can reduce uncertainty and litigation costs.
• Transparent Action – In the event of a breach, swift and transparent action is essential. Co-ordinated communication with regulators, customers, and insurers can mitigate reputational damage and reduce litigation risk.

The Bigger Picture

London’s business environment thrives on trust, between companies and customers, employers and employees, suppliers and partners. Cyber-incidents strike at the core of trust, making disputes inevitable. While regulation and litigation will continue to develop, the businesses that succeed will be those that treat dispute resolution not as a last resort but as an integral part of risk management.

In short, privacy litigation is not just a legal issue, it is a reality of business. For London companies, ignoring it is no longer an option.

This article was first published in London Business Matters in November 2025.

Disclaimer: The information on the TV Edwards website is for general information only and reflects the position at the date of publication.