Paymaster GDPR appeal puts distress claims before Supreme Court

Paymaster is asking the Supreme Court to decide whether a minimum level of seriousness should apply to data protection compensation claims, in a UK appeal whose hearing is due to conclude on Thursday.

The dispute concerns claims by 432 current and former Sussex Police officers following a pension data breach. Lawyers warn that the outcome could affect businesses’ ability to challenge claims involving minor distress or anxiety before they proceed through the courts, as reported by City AM.

What happened

The officers are seeking compensation for non-material damage following an administrative error in 2019. Paymaster, the force’s pensions administrator, sent annual pension benefit statements to addresses that were no longer current.

Documents relating to approximately 450 serving and former officers were affected. They contained personal information including names, National Insurance numbers and salaries.

The Supreme Court is considering whether data privacy claims require a measurable threshold of seriousness. Paymaster, which operates under parent company Equiniti, is challenging a Court of Appeal decision that found no such minimum applies under the UK’s GDPR framework.

The case concerns compensation for effects such as distress or anxiety rather than a claim confined to financial loss. A central issue in the earlier proceedings was whether claimants needed evidence that someone else had actually read their pension statement.

The background

In 2024, the High Court dismissed most of the officers’ claims. It held that claimants had to demonstrate that a third party had opened and read the misdirected statement.

The Court of Appeal reversed that decision in 2025. Its ruling allowed the dispatch of personal information to an incorrect address to provide grounds for a claim without proof that another person had read it.

That distinction matters to the evidence needed in a data protection dispute: the appeal court’s approach did not make third-party readership a prerequisite. Paymaster’s challenge now puts the separate question of a seriousness threshold before the Supreme Court.

Equiniti’s activities extend well beyond the police pension scheme involved in the case. It administers pensions for public sector organisations, including the civil service and Armed Forces, and provides shareholder services and employee share plans for roughly half of the FTSE 100.

The hearing also comes amid scrutiny of other businesses’ handling of sensitive information. In the same week, ASOS disclosed a cyberattack involving possible access to customer data, after an employee was deceived by hackers impersonating a trusted contact. The Paymaster case, by contrast, arose from statements being posted to old addresses.

What people are saying

James Hyde, a commercial disputes partner at Addleshaw Goddard, said lawyers defending businesses wanted the Supreme Court to place clearer limits on low-level data protection litigation.

He described such claims as “a drain on business time and money”, arguing that claimant firms continued to pursue them despite pressures on court capacity. In his view, greater clarity would benefit both businesses facing proceedings and a court system with limited resources.

Hyde warned that, without a change, companies and courts would continue to face individual and group claims that he considered trivial or without sound grounds. That is the defence-side assessment of the potential consequences, rather than a finding about the officers’ claims.

Tom Moore, a dispute resolution lawyer at Bird & Bird, said a refusal of Paymaster’s appeal was likely to lead to more claims being brought or threatened against businesses by people whose data had been affected.

Moore’s concern was specifically about an early route to ending proceedings: he said businesses would not be able to have a claim struck out solely because it lacked seriousness. That does not amount to a prediction that every claimant would ultimately recover compensation.

Sussex Police declined to comment. Equiniti was approached for a response, but no comment from the company was included in the report.

What happens next

The hearing is scheduled to finish on Thursday, but no date for the Supreme Court’s judgment was given. The decision will determine whether Paymaster succeeds in its challenge to the Court of Appeal’s position on a minimum seriousness threshold.

If the appeal is refused, Moore expects the existing position to encourage further claims and threats of proceedings. For businesses defending them, the practical issue would be the inability to rely on low seriousness alone as grounds for having a case struck out.