Emo­tional damage

Due to the Union-​wide applic­a­tion of the EU General Data Protec­tion Regu­la­tion (GDPR), decisions of courts in EU states other than Austria may also be used to inter­pret the regu­la­tion. At the begin­ning of 2023, two diver­gent decisions regard­ing “emotional damage” (imma­ter­ial damage) were handed down in Germany.

What is "emotional damage"?

“Clas­sic mater­ial damage” is usually pecu­ni­ary damage, i.e. it can be meas­ured in money. By contrast, imma­ter­ial damage is char­ac­ter­ised by the fact that it cannot be meas­ured in money because it is about a negat­ive feel­ing arising when legally protec­ted values are viol­ated. Due to its special nature, imma­ter­ial damage is only compensated in excep­tional cases, namely if there is an expli­cit legal basis for such compens­a­tion. Article 82 (1) of the GDPR is an example of such a basis.

An example: Infringe­ment of the right to be informed

The Olden­burg Labour Court (ArbG Olden­burg, judg­ment of 09 Febru­ary 2023, file no. 3 Ca 150/21) had to assess the follow­ing facts: Shortly after the employer termin­ated the employ­ment contract, the former employee asser­ted his right to be informed under data protec­tion law pursu­ant to Article 15 of the GDPR and set a dead­line of one month (pursu­ant to Article 12 (3) of the GDPR). The former employer considered this to be in abuse of rights and refused to provide inform­a­tion. As a result, the former employee filed a lawsuit for data protection-​related inform­a­tion and compens­a­tion for the imma­ter­ial damage (pursu­ant to Article 82 (1) of the GDPR) caused by the delay. The request for inform­a­tion was partially gran­ted in the course of the proceed­ings only, after 20 months.

In its partial judg­ment, the Olden­burg Labour Court followed the plaintiff's argu­ments and awar­ded him compens­a­tion for imma­ter­ial damage in the amount of 10,000 euro (500 euros for each month after the dead­line). Grounds cited for grant­ing the compens­a­tion for damage were based on the rationale of Article 82 (1) of the GDPR. Accord­ingly, this provi­sion is prevent­ive in nature and meant to have a deterrent effect. The Olden­burg Labour Court did not answer the ques­tion of whether the plaintiff had to show what the imma­ter­ial damage was, refer­ring in this regard to two pending prelim­in­ary ruling proceed­ings before the ECJ (prelim­in­ary ruling reques­ted by the German Federal Labour Court/BAG of 26 August 2021, file no. 8 AZR 253/20 [A], C-667/21 [Kranken­ver­sicher­ung Nordrhein] and by the Austrian Supreme Court/OGH of 15 April 2021, file no. 6 Ob 35/21x, C-300/21 [Österreichische Post AG]).  In these two prelim­in­ary rulings, the ECJ has to decide whether an award of damages based on Article 82 (1) of the GDPR requires the exact nature of the imma­ter­ial damage suffered to be substan­ti­ated, or whether a viol­a­tion of provi­sions of the GDPR alone is suffi­cient.

An example: Damage in the course of processing

The Nurem­berg Regional Labour Court followed a differ­ent line of argu­ment­a­tion (judg­ment of 25 Janu­ary 2023, file no. 4 Sa 201/22). The plaintiff filed a request for inform­a­tion pursu­ant to Article 15 (1) and (3) of the GDPR while her employ­ment contract was still in effect. The defend­ant, plaintiff’s employer, refused to provide the reques­ted inform­a­tion and asked the plaintiff to assert her claim in court. As a result, the plaintiff termin­ated her employ­ment contract and filed a lawsuit (Bamberg Labour Court, file no. 2 Ca 942/20) to enforce her right to be informed. In her lawsuit, the plaintiff claimed that this viol­a­tion of her right to be informed entitled her to claim compens­a­tion for imma­ter­ial damage pursu­ant to Article 82 (1) of the GDPR. The court of first instance found in favour of the plaintiff and ordered the defend­ant to pay compens­a­tion for imma­ter­ial damage in the amount of 4,000 euros. The reason was that infringe­ments must be effect­ively sanc­tioned for the purpose of deterrence. The defend­ant appealed against this decision. The Nurem­berg Regional Labour Court, as the court of appeal, was of the oppos­ite opin­ion and did not award compens­a­tion for imma­ter­ial damage. This decision was based on a restrict­ive inter­pret­a­tion of Article 82 (1) of the GDPR. In doing so, the court relied on recital 146 of the GDPR on the one hand and on its legis­lat­ive history on the other. Recital 146 of the GDPR restricts claims for compens­a­tion to damage caused by data processing. Since inform­a­tion does not involve data processing, Article 15 of the GDPR cannot be used as a basis for liab­il­ity accord­ing to the word­ing of the recital. Origin­ally, the Commis­sion draft also covered damage caused by "other acts incom­pat­ible with this Regu­la­tion". However, the draft was cut back in the course of the legis­lat­ive proced­ure. Based on these two argu­ments, the Regional Labour Court concluded that a viol­a­tion of the right to be informed can only lead to a hefty fine (pursu­ant to Article 83 (5) (b) of the GDPR) but does not entitle a party to claim compens­a­tion for imma­ter­ial damage.

The legal situ­ation in Austria

In Austria, too, both lines of argu­ment are found in liter­at­ure. In previ­ous case law on compens­a­tion for imma­ter­ial damage, a mater­i­al­ity threshold was required in order to affirm that a viol­a­tion of rights has taken place. This is to avoid claims for damages in cases where there is no damage. Accord­ingly, the mere viol­a­tion of the law per se, such as the "fail­ure to comply" with the duty to provide inform­a­tion, does not cause imma­ter­ial damage to the party entitled to inform­a­tion. Rather, it is neces­sary for an aver­age person who is sens­it­ive in matters of data protec­tion to develop negat­ive feel­ings as a result of the viol­a­tion of the right to be informed. Such negat­ive feel­ings must go beyond the feel­ings caused in the aggrieved person by the viol­a­tion of another law.

In its decision of 21 June 2021 (6 Ob 56/21k), the Supreme Court considered miss­ing or incom­plete inform­a­tion to be a viol­a­tion of law which exceeds the mater­i­al­ity threshold because the person entitled to inform­a­tion was "massively annoyed" by it. Accord­ingly, the focus is on whether the viol­a­tion of rights causes an aver­age citizen to be upset beyond usual mood swings in every-​day life. Such emotional impact may include anxi­ety, stress or states of suffer­ing. Such feel­ings may, for example, arise as a result of expos­ure or poten­tial expos­ure when personal data are disclosed.

Relev­ant factors for the assess­ment of compens­a­tion for imma­ter­ial damage include, without limit­a­tion, the intens­ity, dura­tion and frequency of the viol­a­tion as well as the extent of miss­ing data in case of incom­plete compli­ance with the right to be informed.

How is this signi­fic­ant for prac­tical work

So it really does exist, compens­a­tion for "emotional damage". While it is often “laughed at” by prac­ti­tion­ers and “dismissed” as irrel­ev­ant, more and more decisions by national super­vis­ory author­it­ies and courts show that compens­a­tion for “emotional damage” may indeed be awar­ded, and may even be quite consid­er­able in amount. This makes data protec­tion compli­ance all the more import­ant in order to avoid such proceed­ings and the oblig­a­tion to pay damages.

Your KWR Data Protec­tion Team will be happy to assist you.