Claimants in LifeLabs data-breach class action to get $7.86 each

Canadians who applied to be part of a class-action lawsuit against LifeLabs Inc. are now receiving cheques and e-transfers.

KPMG, which is administering the claims, says on the class-action website that more than 900,000 valid claims were received.

Given the large number of valid claims, KPMG says claimants will receive an e-transfer of $7.86. Those receiving a cheque will get $5.86, after deducting a $2 processing fee.

The class action was launched against LifeLabs after a 2019 data breach allowed hackers to access the personal information of up to 15 million customers.

Craig Jones, a law professor at Thompson Rivers University in Kamloops, B.C., says the judge who approved the settlement found that the data was not inappropriately used and no members of the class suffered harm. He also found that the chances of success at trial were minimal and felt a settlement between $4.9 million and $9.8 million would be appropriate.

When the class-action settlement was approved last fall, potential claimants were told they would be eligible to receive about $50, up to a maximum of $150, though legal fees and taxes would be deducted. The precise amount, however, would be determined based on how many claims were filed. 

Jones said the number of people who filed a claim turned out to be much higher than expected.

"This is not a defeat for class actions or the class-action regime," Jones said. 

"Because really what you're trying to do is a couple of things here," the professor added. "One is compensation to the extent people have suffered harm, and here nobody, it turned out, had suffered harm. 

"But the other thing you're trying to do is deterrence, and to impose a penalty upon companies so that ... they might be encouraged to take extra precautions."

LifeLabs has said most of the affected customers were in Ontario and British Columbia. 

In 2020, the B.C. and Ontario privacy commissioners ordered LifeLabs to improve how it safeguards personal health information, and to collect less of it from customers.