CrowdStrike Lawsuits Filed Following Global IT Outage

How Businesses and Individuals Can Seek Compensation for Losses and Rebuild

CrowdStrike Holdings, Inc., a leading cybersecurity company based in Austin, Texas, is currently grappling with a severe crisis. A recent software update, released on July 18, 2024, has led to a global IT outage of unprecedented scale. This faulty update has caused widespread system failures, with millions of Windows-based computers experiencing the dreaded Blue Screen of Death. The incident, described as the ‘largest IT outage in history,’ has severely impacted major industries, including healthcare, airlines, banking, and emergency services.

The Impact of the CrowdStrike Outage

The global outage triggered by CrowdStrike’s software update has had far-reaching consequences. Major airlines reported over 5,000 flight cancellations, while hospitals struggled to access vital medical records, and businesses worldwide faced significant disruptions. The immediate financial losses from halted operations, lost productivity, and the cost of restoring systems are estimated to exceed $1 billion.

Despite CrowdStrike’s swift deployment of a fix, the recovery process has been slow, with many systems requiring physical access to resolve the issues. This has left numerous businesses in a state of limbo, unable to resume normal operations. The cybersecurity firm’s admission of a “defect” in its update has not mitigated the financial and operational damage suffered by its customers and other indirectly affected businesses.

Potential Claimants

The fallout from the CrowdStrike outage has created a broad spectrum of potential claimants, including but not limited to:

• CrowdStrike Investors – Shareholders who suffered financial losses due to the significant drop in CrowdStrike’s stock value following the outage may seek to recover their losses through securities litigation. The company’s mishandling of the software update and the subsequent fallout could be viewed as a breach of fiduciary duty or misrepresentation to investors.
• Businesses with Direct Losses – Companies that utilize CrowdStrike’s cybersecurity solutions and experienced direct operational disruptions can file claims for compensatory damages. This includes costs associated with system restoration, lost revenue, and additional operational expenses.
• Businesses with Indirect Losses – Entities that do not directly use CrowdStrike’s services but were affected by the ripple effects of the outage can also seek compensation. For example, businesses that rely on third-party services, such as payment processing or customer data management, which were disrupted by the outage, may have grounds for a lawsuit.
• Public Sector Entities – Government agencies and public services impacted by the outage, including emergency services and healthcare providers, can claim damages for the interruption of critical operations and public safety risks.
• Legal Recourse for Affected Parties

Businesses and individuals impacted by the CrowdStrike outage may have grounds to file lawsuits seeking compensation for their losses. Legal action can be taken against CrowdStrike for negligence and the financial damages incurred due to the defective software update. However, navigating the legal landscape of such claims can be complex, making it crucial to engage our attorneys who have experience in both product liability and cybersecurity litigation.

The Lawsuit Process

1. Initial Consultation – The first step involves consulting with a product liability attorney to evaluate the viability of the case. This includes assessing the extent of the damages, gathering evidence, and understanding the terms of the affected party’s agreement with CrowdStrike.
2. Filing the Complaint – If the case is deemed viable, the attorney will file a complaint against CrowdStrike, detailing the nature of the defect, the damages suffered, and the legal basis for the claim.
3. Discovery Phase – During discovery, both parties exchange relevant information and documents. This phase is crucial for building a strong case, as it involves collecting evidence, conducting depositions, and obtaining expert testimonies. Evidence such as system logs, financial records showing losses, and expert opinions on the software defect can significantly strengthen the case.
4. Settlement Negotiations – Many cases are resolved through settlement negotiations to avoid the costs and uncertainties of a trial. A skilled attorney will negotiate on behalf of the affected party to secure fair compensation.
5. Trial – If a settlement cannot be reached, the case may proceed to trial. During the trial, the attorney will present the evidence and argue the case before a judge or jury. The attorney’s role is to effectively communicate the facts of the case and advocate for the best possible outcome for the affected party.

Why Legal Representation is Essential in Your Path to Justice

Navigating a lawsuit without legal assistance can be daunting and significantly reduces the chances of a favorable outcome. An experienced attorney can handle all aspects of the case, from filing paperwork and gathering evidence to negotiating settlements and representing the client in court. Legal representation ensures that the affected party’s rights are protected and that they receive the maximum possible compensation.

Potential Damages Recoverable

In a product liability lawsuit concerning the CrowdStrike outage, affected parties can seek various types of damages:

• Compensatory Damages – These cover direct financial losses, including the cost of restoring systems, lost revenue, and additional operational expenses incurred due to the outage.
• Consequential Damages – Compensation for indirect losses, such as reputational damage and long-term business disruptions.
• Punitive Damages – In cases where gross negligence or misconduct is proven, punitive damages may be awarded to punish the defendant and deter similar future conduct.