A new research paper released by the U.S. Chamber Institute for Legal Reform (ILR) found that “private rights of action are inefficient and ineffective,” particularly when used to address data privacy concerns.
“Ill-Suited: Private Rights of Action and Privacy Claims” found that these clauses, which open the door to lawsuits from private lawyers, often “[u]ndermine appropriate agency enforcement and allow plaintiffs’ lawyers to set policy nationwide,” rather than allow regulators and experts to craft policy and protections. They also often lead to inconsistent developments of law, higher litigation costs, and can stunt innovation and consumer choice.
“There is only one group that benefits from private lawsuits: plaintiffs’ lawyers who are simply exploiting private rights of action in privacy laws for their own financial gain,” said Harold Kim, ILR’s chief operating officer. “Rather than allow expert regulators to shape and balance policy and protections, enforcement is driven by frivolous lawsuits that do nothing to protect consumer privacy.”