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Hiscox Hack Suit Advances as Warden Grier Loses Dismissal Bid

July 24, 2020, 8:16 PM

Hiscox Insurance Co. Inc. can move forward with claims against Warden Grier LLP, which lost a bid to dismiss allegations that fault the law firm’s handling of a hack that exposed the insurer’s data.

Legal precedent supports the Hiscox Ltd. unit’s claim of a breach of implied contract at the motion-to-dismiss stage of litigation, U.S. District Judge Nanette K. Laughrey of the Western District of Missouri ruled Thursday.

The ruling shows the risk that firms like Warden Grier take when they make decisions following hacks that involve clients’ data.

Warden Grier and Hiscox did not immediately respond to requests for comment.

Hiscox alleges that after the 2016 hack, Warden Grier paid a ransom in attempt to protect client information but didn’t notify the insurer there had been a breach involving its data.

Hiscox sued the law firm in 2018, asserting breaches of contract, implied contract and fiduciary duty, and professional negligence.

Warden Grier argued that the first three counts should be treated as attorney malpractice and therefore dismissed as duplicative of the fourth count of negligence.

Laughrey ruled that because the allegations don’t necessarily cover professional negligence, Warden Grier’s claims “are not subject to dismissal at this stage on the ground that they are claims for legal malpractice under another guise.”

Spencer Fane LLP represents Hiscox. Horn, Aylward & Bandy, LLC represents Warden Grier.

The case is Hiscox Ins. Co. v. Warden Grier, LLP, 2020 BL 275514, W.D. Mo., 4:20-cv-00237-NKL, motion denied 7/23/20

To contact the reporter on this story: Julia Weng in Washington at jweng@bloombergindustry.com

To contact the editor responsible for this story: John Hughes at jhughes@bloombergindustry.com; Keith Perine at kperine@bloomberglaw.com