(Bloomberg) -- The rich and powerful, looking to protect themselves against any future litigation, are increasingly taking UK agencies to court over allegations they misuse their data, in a tactic that can stall long running probes.

Four separate data lawsuits — two by billionaire Mike Ashley, and one each from fallen tech mogul Mike Lynch and Australian financier Lex Greensill — were filed in the first few months of the year in London. Their aim, a way of trying to get all the information that banks, prosecutors and regulators have on them in a bid to aid any future defense. 

Britain’s top data watchdog last year concluded NatWest Group Plc breached UK politician Nigel Farage’s data protection rights when its former chief executive officer discussed the closing of the UK politician’s bank account with a reporter. Republican frontrunner Donald Trump also filed an unsuccessful data protection lawsuit against an ex-British spy. Lynch settled his case against the UK’s Serious Fraud Office on confidential terms. 

These lawsuits are a “growing phenomenon” that exploit any gap in enforcement agencies’ armor, said Patrick Rappo, a London-based partner at law firm Reed Smith. 

Lynch and Greensill’s administrator declined to comment. Ashley representatives didn’t respond to a request for comment.

After the UK introduced new, stricter data protection regulation in 2018 there was a flurry of small and large data claims as claimants found a route to holding firms to account. That initial burst of activity has now waned — with the large majority of cases confined to high profile figures targeting government agencies.

“When data protection challenges are used as part of a broad suite of defense tactics, issues can be found with the way that data has been handled. These can be used to cause problems for agencies that may ultimately result in the case being dropped or even damages being awarded,” Rappo said.

 

Ashley filed two separate claims came against Morgan Stanley and the country’s revenue department, according to High Court filings tracked by Bloomberg. Ashley is contesting a separate case against the US bank over a nearly $1 billion margin call and was previously embroiled in a tax dispute with the government.

Lynch meanwhile is currently on trial in the US over a “massive fraud” to dupe Hewlett Packard Co. into buying his software startup Autonomy Corp. for $11 billion. The SFO investigated Lynch over the allegations between 2013 and 2015, but dropped the case for lack of evidence. 

Greensill had sued the government’s business and trade department, which sponsors the Insolvency Service that investigated the collapse of Greensill Capital.

Data protection rights are “a key tool in the arsenal of weapons” for those facing unwanted public scrutiny, said lawyers Bryony Hurst and Prashant Kukadia at law firm Bird & Bird. A cost-benefit analysis for individuals with the incentive and resources favors giving such lawsuits a shot, they said.

Waning Suits

The use of this tool comes when these kinds of suits are otherwise waning, according to data compiled by Bloomberg. The fall in data protection cases since 2021 coincided with a series of court decisions that narrowed the scope for success for the claimants.

In a victory for Google, the UK’s Supreme court had ruled that the data claim by a group of people that sought billions of pounds was “doomed to fail.” To win any compensation, individuals must show “both that Google made some unlawful use of personal data relating to that individual and that individual suffered some damage as a result.”

The ruling “dealt a blow” to such class action styled data lawsuits, said Kate Brimsted, a partner at law firm Bryan Cave Leighton Paisner. Providing evidence in such cases is an uphill task and smaller claims are rejected if the costs for hearings are higher. “The courts have been taking a more restrictive approach to low-value individual claims,” she said.

The rich who can afford the costs remain at advantage despite that wrinkle for claimants.

High profile data suits add a “new occupational hazard” for the government agencies when they investigate anyone “particularly well resourced and of a litigious temperament,” Hurst and Kukadia said.

--With assistance from Katharine Gemmell.

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