Software Outage Lawsuits: Recovering Losses From Catastrophic Tech Failures

Status: Investigating claims · Last updated November 2026

If your business lost revenue, or you were stranded, overcharged or harmed, because a software update or cloud outage crippled the systems you depend on, you may be able to recover your losses. A single faulty update can now take down airlines, hospitals, banks and retailers worldwide in minutes. When a technology company’s carelessness causes that kind of failure, the law may hold it responsible.

At Wieand Parker Arreola, we are investigating claims by businesses and consumers harmed by catastrophic software and cloud outages. This page explains how these failures happen, the leading case and who may qualify. Call (215) 666-7777 for a free, confidential case review.

How One Update Can Break Everything

Modern businesses rely on software from a handful of vendors for security, payments, scheduling and operations. Outages can come from:

• Faulty security or system updates pushed to millions of devices at once
• Cloud service failures that take down websites, apps and data
• Payment processing outages that stop sales
• Scheduling and reservation systems that fail and cannot recover

Plaintiffs often argue these failures could have been prevented with basic testing or a gradual “staged” rollout to a small group of devices first.

The CrowdStrike Outage and Delta’s Lawsuit

On July 19, 2024, a faulty update to CrowdStrike’s Falcon security software crashed millions of Windows computers worldwide. Airlines, hospitals, banks and emergency services were disrupted. Delta Air Lines canceled about 7,000 flights, affecting roughly 1.3 million passengers.

Delta sued CrowdStrike in Georgia state court, alleging gross negligence and claiming the flawed update could have been caught with basic testing. In May 2025, a judge allowed much of Delta’s case to proceed, including gross negligence and computer trespass claims, while narrowing others. CrowdStrike denies the allegations and has blamed Delta’s slow recovery on Delta’s own systems.

Passengers also sued. A federal judge allowed a proposed class action to proceed against Delta over refunds and reimbursements after the disruption, and a separate proposed class action was filed against CrowdStrike on behalf of travelers.

The Biggest Legal Hurdle: Contract Limits

Software contracts often cap the vendor’s liability, sometimes at the fees paid, and exclude lost profits. These limits can often be overcome by showing:

• Gross negligence or willful misconduct, which many states will not allow a contract to excuse
• Fraud or misrepresentation about the product’s safety or testing
• Claims by people who never signed the contract, such as customers and passengers
• Statutory claims, such as consumer protection or computer trespass laws

Who May Qualify

These are the main factors we review:

1. A significant outage caused by a vendor’s software update, cloud failure or similar event.
2. Measurable losses, such as lost revenue, canceled sales, overtime, recovery costs, travel expenses or spoiled goods.
3. Your relationship to the vendor. Whether you contracted directly with the vendor or were harmed as a customer of a business that did.
4. Your contract terms, including liability caps, arbitration clauses and notice requirements.
5. Prompt action. Contract and filing deadlines apply, so contact a lawyer promptly to protect your rights.

Document Your Losses

Keep records showing when systems failed and when they recovered. Save vendor communications, status pages and incident reports. Track costs carefully: lost sales, extra labor, IT recovery, refunds and customer credits. Travelers should keep receipts for hotels, meals, rebooked flights and ground transportation.

Software Outage FAQs

Can a small business sue a big software company?

Yes, if the facts support it. Gross negligence claims and claims outside the contract may get around liability caps.

My flight was canceled during the outage. What can I recover?

You may be entitled to refunds and reimbursements under airline rules and federal requirements. You may also have claims for additional expenses.

What if the outage put someone’s health at risk?

Outages that disrupt hospitals can cause patient harm. See our hospital ransomware lawsuit page for related claims.

Contact a Software Outage Lawyer at Wieand Parker Arreola

If a software or cloud outage caused you or your business serious losses, contact Wieand Parker Arreola for a free, confidential case review. If we take your case, you pay no fee unless we recover compensation for you. See our data privacy and cybersecurity claims, related AI code failure cases and all of our technology and AI claims.

Call (215) 666-7777 or contact us online for a free case review.

This article is for general information only and is not legal advice. Reading it does not create an attorney-client relationship. Litigation details are current as of November 2026 and may change.