<<<<<<<<<<< [NYT] AUG 24, 2001 Can Hacking Victims Be Held Legally Liable? By CARL S. KAPLAN
Suppose, Margaret Jane Radin of Stanford Law School wrote recently, that a Web site operated by a securities brokerage suffers a crippling attack by hackers. The ability of its customers to conduct trades is hampered for several hours, or even blocked entirely. Imagine, too, that on the day of the attack the stock market is volatile, and that many customers are trying unsuccessfully to buy or sell stocks in a flash.
Of course, hackers are easy to blame. But what about the companies that investors rely on to make trades? Are the brokerage firms and their network providers -- which failed to prevent the attack that harmed the site -- vulnerable to a second onslaught a nasty lawsuit from unhappy clients who lost money as a result of the shutdown?
Professor Radin isn't the only legal thinker posing this question.
Another paper co-authored by two partners and a legal assistant at a
major law firm, also considers whether companies that fail to take
reasonable steps to protect their computer systems from malicious
attacks or internal malfunctions are sitting ducks for lawsuits.
>>>>>>>>>>>>>
This argument is actually pretty old, late 70s to my knowledge. To put things crassly, in my own prejudiced way, there have been a handful of lawyers trying to make a living out of computers. They have produced several papers to scare management into giving them contracts.
See Susan Nycum, late 70s, early 80s. She was also a theorist for computer security, along with Donn Parker. Also see Computer/Law Journal articles, same period.
Upon the advent of the PC, arguments shifted to product liability. One of the papers (I think it was Nycum's, but I'm not sure) argued that product liability is stricter for the general public than for corporations. The paper implied that software companies might be subject to huge liability for unreliable software, a la the Pinto Ford.
I see the NY Times article as a morph of this theme.
To the best of my knowledge corporations have paid these legal prophets no attention.
-- John K. Taber