Emerging Trends: Do Cyber Law And Professional Liability Intersect?

The amount of data that we electronically communicate on a daily basis increases every day. With this increase, we are seeing more claims for breaches caused by a lack of security and governance over data, failure to detect phishing and spear-phishing schemes, and fraud prevention.  

Orange County attorneys Esther Holm and Justine Kilpatrick recently defended an escrow company in connection with a claim by a homebuyer who wired funds to a criminal hacker instead of the escrow company. Discovery revealed a number of safeguards the escrow company had in place and conclusively established the hacking occurred with a third party involved in the real estate transaction. In their lawsuit, the homebuyers eschewed direct claims of cyber breach in favor of allegations that the escrow officer was negligent and breached his fiduciary duty, because he did not read the entirety of an email exchange where the escrow officer had been impersonated by the fraudster. The plaintiffs'