fter the famous software update that took down many companies worldwide in mid-July, it was expected that at least one lawsuit would appear for the CrowdStrike company.
The perfect example in this case might be when Delta sued the company for $500 million in damages and hired the lawyer David Boies to defend them.
Also, other companies were looking for their compensation before Delta appeared, claiming that CrowdStrike tricked them about the software update procedures.
To defend themselves, the cybersecurity company has hired the law firm Quinn Emanuel Urquhart & Sullivan to be ready for the legal attacks that are coming very soon.
Microsoft has also been drawn in these situations but with minor blame because the defective software update has affected only the machines that were using Windows. Mainly, CrowdStrike has to deal with the legal challenges.
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According to Rob Wilkins, an employee at Jones Foster law firm and co-chair of complex litigation and dispute resolution practice group, CrowdStrike could be saved by the contractual limits on damages which are usually included in enterprise software contracts.
“What I found was interesting is that there’s a contractual limit on damages between CrowdStrike and Delta, and I assume that there’s going to be a similar type of contractual limit on damages in the other customers’ contracts,” Rob Wilkins stated for TechCrunch.
Delta maintains its point of view and claims that the faulty software update happened because of negligence and willful misconduct from the cybersecurity company which may invalidate the initial contract. It is an important aspect that Delta services were disturbed for five days compared with United services which were interrupted for only three days.
In response, CrowdStrike is claiming that Delta had issues with the internal systems and the company can’t blame only the faulty software system.
Rob Wilkins also stated that Delta might face some problems with proving the charges which involves a lot of proof and effort to convince the judges. Also, he expects that individual companies will likely unite and sue CrowdStrike to reduce the costs and increase the chances of winning the lawsuit.
“Typically with class actions, people pile on, and I wouldn’t be surprised if that’s the case, and then you see everything being consolidated into a by the multidistrict litigation panel, assigning all the cases across the country to one particular federal district court for all discovery-related purposes — and that cuts down significantly on the process,” he stated.
It remains to be seen whether Delta's accusations are correct and whether it will receive compensation from the cybersecurity company.
By
Adam Brown
•
September 3, 2024 1:00 PM
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