Failure to Prepare: Who's Liable in a Data Processing Disaster?
32 Pages Posted: 21 May 2009 Last revised: 26 Jun 2009
Date Written: 1989
What duties do corporate executives owe their corporations, shareholders, depositors, creditors, or customers regarding computer disaster recovery? This paper examines whether failure to take adequate precautions for computer disaster recovery constitutes negligence not only in the everyday sense, but in the legal sense as well. Such legal negligence might leave corporations, directors, and officers liable for certain damages suffered due to inaccessibility or loss of records and data processing capacity during a computer disaster. Part I of this paper discusses the disaster recovery options available to corporations. Part II outlines corporate liability under several statutes requiring computer disaster preparedness. Part III discusses the common law duties of corporations, directors, and officers as applied to this topic. Finally, Part IV suggests a theory of tort liability that might be applied to losses in computer disaster, and indicates areas to which this theory might extend.
Keywords: Computer disaster recovery, corporations, liability
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