Law firm handling CRA hack class action withdraws after getting hacked
Federal government planned third-party claim against ransomware victims Murphy Battista LLP
The class action law firm representing taxpayers whose personal information was stolen by hackers in a data breach at the Canada Revenue Agency has withdrawn from the case after becoming the victim of its own cyberattack.
Vancouver-based Murphy Battista LLP filed the proposed class action back in August 2020, just days after the federal government confirmed that a security vulnerability allowed more than 11,000 CRA and GCKey online portal accounts to become exposed to hackers seeking to redirect emergency Covid-19 benefit payments to themselves.
However, according to a recent Federal Court ruling, Murphy Battista suffered its own ransomware attack in April 2021, when hackers gained access to the law firm’s networks.
After learning of the hack, lawyers for the federal government sought the removal of Murphy Battista as lawyers for the class and announced its intention to bring a third-party claim against the law firm for contribution and indemnity towards class members whose information was compromised in both attacks.
Murphy Battista was replaced as class counsel in December 2021, but the Attorney General of Canada proceeded with a motion for the Federal Court action to be stayed on the basis that the court had no jurisdiction to hear the third party claim, which it intended to bring in B.C. under the province’s Negligence Act.
However, Justice Richard Southcott denied the motion, finding that the third party claim for contribution and indemnity had “no possibility of success” because the plaintiff had limited its claim to damages for only the federal government’s several liability.
Although there remains the theoretical possibility that the Attorney General could get sucked into separate provincial court actions relating to the alleged Murphy Battista breach, the judge was not concerned enough prepared to stay the Federal Court action on that basis either.
“The interests of justice do not support staying this action based on the speculative possibility of related proceedings being commenced in the future in a provincial superior court,” Justice Southcott concluded in his Dec. 20 ruling.
Follow us on Twitter @CourtReportCA
Story tips or comments to CourtReportCanada@gmail.com