It was on March 9th, 2021 when a quarter of the servers of the company - OVHCLOUD - located in Strasbourg, one of the largest cloud computing providers in the world, caught fire.
My company has been affected, so:
How can I claim damages to OVHCLOUD?
This is the query raised by our customers, repeatedly. Today we are going to tell you a little bit more about the consequences and the impact that this fire is having throughout the digital world. Here are the key points to issue the appropriate claimer.
Our Spanish Civil Code states that those who, due to fault or negligence, by action or omission, will be liable for damages, will be obliged to repair the damages caused. Next target: review our contract with OVH, in order to determine the scope of our legal options.
Based on the latter, we will develop a solution for Spanish, French, German and other websites that have been affected by the OVH fire, worldwide. In fact, the consequences of this outage affected highly relevant companies, such as:
Online video games such as RUST.
Global companies such as NETBLOCKS.
For sure, the spread had bad impacts on the above corporative features. But focusing on our own sites represents headaches, as well, to which we would like to offer some clues:
Malfunctions of your email during last week.
You received a phone call from your IT responsible last week; he informed that your website was affected due to the use of the hosting in his company.
Your website crashed, or no orders were received via your online shop, last week.
The comments on your forum did not pop up, last week... etc.
If so, then you should entrust a team of experts to look after the interests of your website. We, at Carrillo Asesores schedule the appropriate deadlines and claim of damages to offer you the right solutions.
Top priority is to:
Identify the JUSTIFIABLE DAMAGES
These damages must be duly evidenced. We recommend the engagement of a technical expert to show that there is a connection between the fire and the damage to the website. The economic loss that your company has suffered as a result of the damage is another compulsory aspect.
The loss of a server (independently if it caused by fire or by any other reasons, such as a cyber-attack) may generate an economic set-back; and it is not just because of the expenses related to re-instalment, as the cost of a server or a new website can be easily quantified (the cost of a server or a new website is well known). But also in terms of losses regarding the company’s stop of revenues, immediate actions should be taken.
These two concepts are:
Emerging loss; it is the directly quantifiable loss.
Loss of profit; the profit that ceases as a result of the consequential loss. Loss of profit. A very common concept in the context of insurance or legal claims. This is the greatest loss that a company can face in these cases, depending if it is a big company or an SME. This estimation of loss of profit must be objectively and duly evidenced.
Possible consequences of the OVHCLOUD servers damage
Under the assumption that, as a consequence of the outage, there is a damage of the company's online shop (for example if the breakdown did last during several days and the reactivation of the power systems is not feasible), then the following measures will apply:
New online shop.
Loss of sales via online channel (less increase in sales through other channels during this period due to the absence of the ecommerce portal).
Cost of employee hours while dealing with complaints in this regard.
Opportunity cost of managing the development of the new online shop by the staff in charge, who cannot focus on other tasks during this time.
From a fiscal point of view, although some of these costs will not be reflected in the official accounting ledgers (such as opportunity costs), others, such as the loss of intangible assets (the server, the website, the online shop...) will apply. These accounting losses can merge to a bad image in front of shareholders, investors, institutions.... It can even take a profitable company with benefits to produce loss and, subsequently lose a part of its capital.
Steps to claim damages
As a next step, if your website is affected by the blaze, we recommend our clients to inform the company via BUROFAX within briefest delays. The company itself has set up a service to check the status of the domains affected, you can view this at http://ovhcloud
Legal actions must be engaged if the company OVH does not undertake the repairs required by law “in natura”, or in those cases where repairs are not feasible due to the fire, then the relative compensations to your company will follow whilst an economic evaluation and compensation in cash.
It is important to bear these guidelines in mind, as they may be applicable whenever situations with similar effects occur. Just think of other damages that may harm or destroy your power systems!
Where should we claim?
The operative FORUM is subject to CONSUMER, online sales and purchases regime; according to article 29 of the Law on Information Society Services (LSSI), the correct approach will be the place of usual residence of the consumer: "Contracts concluded by electronic means in which a consumer acts as a party shall be presumed to be undertaken in the place where the consumer has its regular residence".
A closer look at the meaning of the OVH CLOUD fire reveals:
In this case, a hosting is a database space for which a licence is rented on a server. It collects the necessary data from a website so that it can exist on the internet.
Thus, the website runs on the servers that caught fire. If our company had its backup on that CLOUD, and that CLOUD - OVHCLOUD - did not have backups to protect its customers and/or the services it offered, then it will be the companies’ responsibility to deal with the consequences, Our clients are advised to activate their data recovery plans for such emergencies; it will minimise costs significantly!
In fact, the company has stated through its founder Octave Klaba THROUGH THE SOCIAL MEDIA that its commitment is, among others to:
Build 10,000 servers in less than 15 days.
Test the real operative of all its servers and fibre, especially in the cities of Paris and Frankfurt, which were very badly affected.
Re-launch the SBG3 and SBG1 storages. Not an easy challenge!
Therefore, although OVHCLOUD is a foreign company, and you are a Spanish company, if you have suffered WEBS damages derived from the fire of the OVH servers, we advise you to count on our Legal Department. And yes, we will make a SECURITY COPY. We will undertake whatever measures are deemed as appropriate to keep your website and your company online and active.
Daniel Borrachero - Economist at Carrillo Asesores
Macarena Perona - Lawyer at Carrillo Asesores