The IT outage at CrowdStrike in July affected businesses worldwide. Airports experienced difficulties in checking in luggage and handing out boarding passes, several media sites could not publish messages, and the services of several banks and government agencies were hampered. Now that the causes of the outage are known, several parties are trying to claim compensation. Are they entitled to it?
The airline Delta was among the first to make public claims against CrowdStrike. The airline had to tinker with its schedule for six days before the problems were fully resolved. CrowdStrike shrugged off responsibility because it has “minimal potential liability.”
Contractual provisions
Is it that simple? Attorney Rob Wilkins has shed his light on the matter to TechCrunch and argues that CrowdStrike still faces a huge legal challenge. There is one possible way out, and that is contractual limits on damages. The contracts CrowdStrike enters into with users have these contractual limits built in. “What I found interesting is that there is a contractual limit on damages between CrowdStrike and Delta, and I assume there will be a similar type of contractual limit on damages in other customers’ contracts,” Wilkins said.
Exceptions to the contractual limits are made in cases of “gross negligence” or “willful misconduct on the part of CrowdStrike.” Both cases are very difficult to prove.
Tip! CrowdStrike reveals cause of global Windows blue screen problems
Complaint from investors
Investors in CrowdStrike took it a step further and filed a complaint. They feel misled by the company because it was never shared that software updates are not extensively tested before they go live.
“The bottom line is: did CrowdStrike intentionally misrepresent or not tell investors that it was fully up-to-date with respect to all of its security procedures and monitoring procedures related to its software platform?” says Wilkins.
Insurers also want a share
Wilkins additionally predicts that insurance companies also want to get reimbursed. They have now had to cover the cost of the IT failure.
It is possible that the various parties will combine their complaints to make a large claim against CrowdStrike and the July IT outage. With such a joint claim, new parties will likely come forward to take sides and get compensation. Either way, the outage story will continue in court.
Also read: Soft landing for CrowdStrike earnings, but outage fallout continues