Courts are still undecided – by Valentin Schulte Stud. Jur. / Attorney at Law Dr. Thomas Schulte from Berlin.
The General Data Protection Regulation, or DSGVO for short, regulates the processing of personal data within the European Union. What happens if the rights of data subjects are not respected?
Is monetary compensation provided for by law in the event of a data protection breach?
Within the General Data Protection Regulation, Art. 82 indicates that victims of data protection breaches may be entitled to compensation. For example, paragraph 1 states that „Any person who has suffered material or non-material damage as a result of a breach of this Regulation shall be entitled to receive compensation from the controller or processor.“
Legal standard from Europe also speaks to damages for non-material harm
Because of damage that is not pecuniary, compensation in money can be claimed only in cases determined by law, says Section 253 of the Civil Code (BGB). The most important case of application for immaterial damages is compensation for pain and suffering, which can be considered as a claim in the case of violation of highly personal legal interests such as life, body, health or sexual self-determination.
Damages for data protection violations also as compensation for pain and suffering?
The General Data Protection Regulation requires that data processing be subject to certain rules. So does a data subject receive compensation for damages in the event of a violation of these rules, even if he or she does not suffer any financial loss, as compensation for pain and suffering?
Courts disagree in Germany
With regard to the assessment, however, the courts in Germany disagree on how the standard, which is based on European law, should be interpreted. The GDPR standardized the different regulations of the member states of the European Union. Under German law, damages are considered to be compensation for a loss that has occurred; according to the traditional view, this is always a pecuniary loss. This means that a loss of assets suffered by the victim of a damaging event must be made good by the damaging party.
A classic example is a car accident
Anyone who damages another’s car must then provide, through himself or his insurance company, the amount of money necessary to restore the situation that prevailed before the accident. The same applies to other points, such as damage to health. Things get difficult with so-called „intangible damages,“ i.e., damages as a payment to restore a loss that is not physically tangible, such as damage to reputation.
After the Second World War, there were a number of leading decisions in this area that awarded damages to celebrities in particular if their rights had been interfered with. However, these decisions are exceptions and are by no means the rule in German jurisprudence. The American idea of awarding an injured party a large sum of money as additional punitive damages has not caught on in Germany. These payments are based on the idea of punishing the damaging party and rewarding the party that has worked to enforce the law and thus protect society as a whole.
Compensation for damages in the event of a breach of the General Data Protection Regulation – current situation
In Germany, such a process works a little differently. Judge claims, because of a trivial matter, there is no compensation for damages. Highest German and European courts intervene against it.
For example, someone in Germany filed a lawsuit and had to go through the Federal Constitutional Court to the European Court of Justice (ECJ). How did it get this far? Before the local court, a former employee sued for damages because of the storage of his data. The court decided not to award the claim, but said that it was such a trivial matter that there would be no damages. The complainant appealed against this all the way to the Federal Constitutional Court, which in turn concluded that the interpretation of European law was the task of the European Court of Justice and thus referred the dispute to the ECJ. As the highest European court, the ECJ, which is based in Luxembourg, has the task of monitoring compliance with European law and at the same time answering questions about the interpretation of this law. The injured party will therefore have to wait a few more years until a decision is made there. What is important is whether the ECJ finds that there is a so-called „materiality threshold“.
Is there a materiality threshold – this is not yet decided
This materiality threshold is, so to speak, an invention of German judges to narrow down the standard that does not speak of materiality. After all, the legal tradition still applies in Germany: damages are only awarded for the damage, and damage is a dent on a car, not a bad feeling. In view of the unambiguous wording of the law, this legal view will probably not prevail.
Valentin Markus Schulte
Economist, Stud. Iur
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