Cyber security under the UK GDPR is a crucial concern for any business handling personal data.
With cyber attacks posing a constant risk to operations, finances, and brand reputation, organisations of all sizes must take proactive steps to safeguard their digital infrastructure. By aligning your cyber risk management strategies with data protection principles, you not only strengthen your legal compliance but also significantly reduce the likelihood of damaging breaches. Our data protection solicitors can support you in achieving this by helping you conduct robust audits, implement technical safeguards, and train your staff to respond effectively to evolving cyber threats.
We will examine the following:
- What regulations does your business need to comply with?
- What are the business implications of a cyber attack?
- What are the legal implications of a cyber attack?
- How should your business deal with a cyber security breach?
- How can your business prevent cyber attacks?
- How can UK GDPR compliance help prevent cyber risks?
- Stay secure with expert legal support
What regulations does your business need to comply with?
Your cyber security requirements will depend on your business type and the risks involved. Proactive action to prevent cyber attacks is essential for most businesses, but there is no single set of regulations governing this.
Instead, various regulations apply, with some rules universal and others specific to certain industries.
Key Regulations include:
- UK GDPR and data security: These rules require the secure processing of personal data using appropriate technical and organisational measures, including risk analysis and data protection methods like pseudonymisation and encryption.
- Security of Network and Information Systems (NIS) Regulations: These rules govern IT systems and apply to businesses in the energy, healthcare, and transportation sectors. They also apply to cloud service providers. They are designed to mitigate the fallout from incidents affecting the security of network and information systems.
Other laws target cyber security in financial services and electronic communications businesses. Regulatory requirements are flexible, ensuring measures are appropriate and proportionate to the specific business.
What are the business implications of a cyber attack?
Cyber attacks can range from hacking by cyber criminals to phishing. They have the potential to impact your brand and market position significantly.
They can cause severe damage to your business operations by causing extended downtime and breakdowns in core business functionality. This can result in lost productivity, revenue, and increased customer dissatisfaction, significantly impacting your reputation and damaging trust and profit margins. Loss of confidence from your customers can further harm your brand and impact future revenue streams. Companies can also find themselves heavily out of pocket, given the costs of investigating and handling cyber attacks and data breaches.
Business supply chains are especially susceptible to cyber attacks. Cyber breaches can disrupt the flow of goods and services by delaying supply chain activities and inflating costs for your business and its partners, thereby raising mistrust and damaging partnerships within the supply chain.
Employee morale and productivity can also suffer deeply from cyber attacks. Job insecurity, financial losses, and data breaches can cause significant stress and anxiety for your staff, leading to increased absences, higher staff turnover, and a disengaged and low-performing workforce.
What are the legal implications of a cyber attack?
A cyber attack can have serious legal repercussions for your business. and can potentially lead to financial losses, regulatory fines, and customer claims.
For instance, a cyber attack leading to loss of personal data could result in enforcement action by the Information Commissioner’s Office (ICO) under the UK GDPR, which can impose heavy fines for breaches of data protection principles. These fines can be as high as £17.5 million or 4% of a business's global annual turnover, whichever is higher.
A cyber attack can also lead to potential issues with your contracts and customers, resulting in various legal implications and consequences. For instance, contractual breaches and liabilities, such as a customer claiming a breach of contract or damages due to a data breach, may arise. Cyber attacks or similar data security incidents could also give rise to customers terminating their contracts and refusing to work with you or a supplier again.
How should your business deal with a cyber security breach?
If you fall victim to a cyber attack, one of the first crucial steps is to contact your insurer immediately. This prompt action is vital for several reasons:
- It ensures you comply with your policy's notification requirements, potentially preserving your coverage.
- It allows the insurer to provide immediate guidance and support, including access to cyber security experts and legal advisors.
- It initiates the claims process, helping to mitigate financial losses.
Other legal considerations and obligations include:
- Data Protection Act 2018 and UK GDPR compliance:
- Report personal data breaches to the Information Commissioner's Office (ICO) within 72 hours of becoming aware of the breach, if it's likely to result in a risk to individuals' rights and freedoms.
- Inform individuals promptly if there is a significant risk to their rights and freedoms.
The ICO can provide valuable advice on managing the breach and may need to be involved in any subsequent investigation or regulatory action.
- Network and Information Systems (NIS) Regulations 2018: Operators of essential services and relevant digital service providers are required to report significant incidents to the relevant competent authority.
- Financial Conduct Authority (FCA) regulations: FCA-regulated firms are required to report material cyber incidents.
- Contractual obligations: Notify clients, partners, or suppliers as per contractual agreements.
- Companies Act 2006: Directors have a duty to promote the success of the company, which may include managing cyber risks and reporting significant incidents.
- Industry-specific regulations: Certain sectors may have additional reporting requirements (e.g., healthcare, telecommunications).
- Criminal law: Report certain cybercrimes to law enforcement agencies.
- Securities regulations: Listed companies may need to disclose material cyber incidents to the market.
- Privacy and Electronic Communications Regulations (PECR): Telecom providers have specific security and breach notification obligations.
Businesses should also maintain records of all breaches, implement measures to prevent future attacks, and cooperate with authorities in any investigations.
Besides any legal obligations you may have to report a cyber attack, doing so demonstrates your commitment to transparency and proper handling of the incident.
You should also report the breach to the National Cyber Security Centre (NCSC): Whilst you are not legally required to do so, the NCSC can help minimise reputational damage from personal data loss.
How can your business prevent cyber attacks?
Given the threats highlighted above, your business needs to take proactive steps to prevent a cyberattack from occurring.
You should educate all staff about malware, unsecured networks, and email protocols, provide appropriate training for new software systems, implement an information security policy necessary for secure access control to your systems, and conduct regular security reviews.
To manage risks in commercial transactions, ensure that any third parties you work with have adequate security by conducting due diligence on their IT systems, data policies, and training procedures. Also, consider implementing security policies for them to follow.
How can UK GDPR compliance help prevent cyber risks?
Complying with the UK GDPR framework will help your business minimise risk and enhance your data security measures, thereby mitigating the potential for cyber attacks and data breaches involving personal data.
The UK GDPR obligates businesses to establish robust technical and organisational measures to protect personal data. Implementing such measures will reduce your business's vulnerability to cyber threats.
Here are some key strategies to both prevent cyber attacks and safeguard any personal information you may deal with:
- Prioritise UK GDPR compliance – build good data practices, conduct regular data protection audits, and continuously assess your compliance with the UK GDPR rules. This will help ensure compliance and enable you to better protect the data you have.
- Deliver regular employee training – cyber security awareness training will help your staff to recognise and report suspicious activities, reducing the likelihood of cyber attacks against your business.
You should also consider a robust checklist for cyber security measures, directing staff to:
- Analyse risks to data security posed by the organisation's processes for personal data.
- Assess the cost of implementing any security measures and their proportionality.
- Introduce an information security policy and regularly review and update it.
- Implement essential technical controls and consider enrolling in the government-backed Cyber Essentials certification scheme.
- Use encryption and/or pseudonymisation where appropriate.
- Implement adequate recovery systems to address any potential security breaches.
- Regularly review your security systems.
- Ensure that the third-party processors you deal with maintain adequate security protocols.
- Focus on data minimisation – by collecting only the personal data that is strictly necessary for your business purposes. This approach not only reduces the risk of unauthorised access to sensitive information but also limits your company's exposure and potential liability in the event of a cyber attack or data breach.
- Maintain regular and secure backups to enable swift recovery in the event of a cyber attack or data breach. It also helps you to ensure business continuity.
- Carry out consistent penetration testing – which replicates real-world attacks to identify weaknesses in your defences. This process can help you uncover vulnerabilities that could be exploited by malicious third parties and prepare you for preemptive remediation.
- Encourage strong passwords, access controls and encryption by implementing policies and encryption protocols that help to safeguard sensitive data and prevent unauthorised access. Access controls, such as multi-factor authentication, can also help prevent unauthorised access.
- Plan to detect and handle incidents – with a clear plan on how to respond to data breaches so you can quickly contain any damage. Your business plan should include procedures for identifying breaches, preventing them, and implementing recovery measures. It should also cover your legal obligations to report personal data breaches to the data protection regulator and affected data subjects where required.
Businesses should always prioritise cyber security, practice good data governance, and observe the UK GDPR rules. Contingency planning, employee training, and effective detection mechanisms are crucial for mitigating the risks of cyberattacks and promptly managing data breaches.
Stay secure with expert legal support
The cost of poor cyber security can be devastating, from regulatory fines to reputational damage and operational downtime. By embedding sound data protection practices into your risk management approach, you can mitigate vulnerabilities and build trust with stakeholders. Whether you need help conducting GDPR audits, designing incident response plans, or reviewing supplier contracts, our data protection solicitors are here to help your business stay compliant, resilient, and secure.
