The Data Protection Commissioner (DPC) has published her final Annual Report covering the period of 1 January 2018 to 24 May 2018. The Report includes some interesting case-studies, such as the prosecution of a company for sending marketing emails to work email addresses. It also discusses litigation to which the DPC was a party to this year, including the case of Nowak v DPC, where the High Court followed the CJEU’s decision in YS v Minister voor Immigratie & Ors, finding that a controller exercises some discretion in regard to how to respond to an access request.
The European Data Protection Board (EDPB) has published the eagerly awaited draft Guidelines on the territorial scope of the GDPR. The 23-page Guidelines, which are open to public consultation until 18 January 2019, aim to help EU and non-EU established controllers and processors determine whether their processing operations fall within the scope of the GDPR, and ensure a consistent approach to the application of the GDPR. This note considers some of the EDPB’s key recommendations and examples of when the GDPR does or does not apply.
Following the EDPB’s Opinion last month, the Irish Data Protection Commission (DPC) has published a non-exhaustive list of processing operations requiring a Data Protection Impact Assessment (DPIA) to be carried out. The list encompasses both national and cross-border data processing operations. It should be read in conjunction with Article 35 of the GDPR and the WP29 DPIA Guidelines.
The UK Court of Appeal has dismissed an appeal against the High Court’s decision that Morrisons is vicariously liable to 5,000 employees for misuse of their personal data by a rogue employee.
The decision is causing shockwaves amongst businesses, as it shows that a company may be held vicariously liable for a data breach caused by an employee, even if the employee’s motive in committing the breach was to harm the company (Wm Morrisons Supermarkets Plc v Various Claimants  EWCA Civ 2339).
The amount of compensation to be awarded has yet to be determined. The Court of Appeal acknowledged that data breaches caused by either corporate system failures or negligence by individuals acting in the course of their employment may lead to a large number of claims against companies for ”potentially ruinous amounts”, and said that the solution is to insure against such catastrophes. In the court’s view, the availability of such insurance was a valid answer to the “Doomsday or Armageddon arguments” about the effect of its decision.
Although this is a UK decision, it will be of persuasive authority to the Irish courts if a similar action is brought here. It remains to be seen whether the decision will open the floodgates to vicarious liability actions being taken against companies for data breaches caused by employees. However, it is likely to be easier to take such actions, as the Irish Data Protection Act 2018 allows compensation to be awarded to data subjects for non-material loss, such as emotional distress. Morrisons has indicated that it intends to appeal the decision to the UK Supreme Court.
Our blog on the High Court’s decision is available here.
Earlier this year, the Irish Data Protection Commission (DPC) published a draft list of processing operations for which it considers it is mandatory to conduct a Data Protection Impact Assessment (DPIA). Following a public consultation, the DPC submitted its draft list to the European Data Protection Board (EDPB) for approval. The EDPB has now published an opinion on the DPC’s draft list. The DPC has two weeks to communicate to the EDPB whether it intends to amend its draft list or maintain it in its current form, and provide an explanation for its decision.
The Irish Government has published its legislation programme for Autumn 2018. The programme lists priority legislation for publication this Autumn, as well as legislation expected to undergo pre-legislative scrutiny. Listed below are the data protection, cyber-security and IP-related Bills coming down the track.
- Communications (Retention of Data) Bill – This Bill will revise and replace the Communications (Retention of Data) Act 2011. The Heads of this Bill were published last October 2017, following publication of Mr Justice Murray’s Review of the Law on the Retention of and Access to Communications Data. That Review concluded that many features of the 2011 Act are precluded by EU law. The 2011 Act requires telephone companies and ISPs to store everyone’s metadata for up to two years which, in Mr Justice Murray words, constitutes “a form of mass surveillance of virtually the entire population of the State”. Mr Justice Murray said that Irish legislation should be consonant with the limitations as to the proper scope of a system of communications data retention and disclosure laid down by the EU Court of Justice in a number of recent cases, including the Tele2 case. The Heads of the Bill are available here.
On 12 September 2018, the UK Deputy Information Commissioner, James Dipple-Johnstone, made a speech to the CBI Cyber Security: Business Insight Conference in which he discussed recent data breach reporting trends in the UK.
The Deputy Commissioner noted that since the GDPR came into effect on 25 May 2018, the ICO has received approximately 500 calls per week to its breach reporting line. After a discussion with the ICO’s officers, roughly one third of these organisations decide that their breach does not meet the reporting threshold. The Irish Data Protection Commission has also been reported as having received a massive increase in breach notifications since the introduction of the GDPR.
The European Parliament has adopted its position on the controversial proposed Copyright Directive, which includes a proposal for online content sharing service providers to remunerate artists (notably news publishers, journalists, musicians, performers and script authors) for their work when it is used by sharing platforms such as YouTube, Facebook or Twitter. The reform of EU copyright rules is part of the European Commission’s Digital Single Market Strategy. The Commission recognises that whilst online services provide ease of access to creative works and offer opportunities for creative industries to develop, it also generates challenges when copyright protected works are uploaded without prior authorisation from copyright holders.
The Scottish Courts have given an interesting decision in relation to IT contracts, relating to the allocation of delivery risk between supplier and customer and the importance of doing what it says in the contract.
In David MacBrayne Limited v Atos IT Services (UK) Limited (2018), Atos, a supplier, had entered into an agreement with David MacBrayne Limited to supply a digital platform. The engagement was not successful and the parties claimed and counter-claimed against each other for material breach of the contract (amongst other things).
Customer Dependencies – Whose Responsibility is Delivery?
IT contracts will often include dependencies on customers to provide the supplier with information/documentation, some negotiated more than others.
In this case, the dependency was on the customer to use all reasonable endeavours to provide such documentation, data and/or information that the supplier reasonably requested and which was necessary to perform its obligations under the contract.
The question was whether this obliged the customer to provide the supplier with detailed specifications of their requirements in sufficient time to allow the supplier to comply with their obligations under the contract. In other words, to what extent should the customer be pro-active in telling the supplier what to do and thereby share delivery risk.
The Court said such general obligations are indicative of a responsive obligation (i.e. respond to queries from the supplier) as opposed to an obligation on the customer to be proactive in setting out their requirements. The Court said such obligations did not displace the obligation of the supplier to be primarily responsible for ascertaining the requirements for the service.
When negotiating IT transactions, it is very important to carefully consider (and negotiate) the scope of dependencies. While this decision points to a pragmatic approach by the courts which favours the customer, the very existence of general (or worse, unclear) dependencies can lead to disputes becoming more protracted and costly than they need to be.
Delay – Managing The Fall Out
The contract required the supplier to provide notice and follow a particular procedure in order to deal with delays. Here that process wasn’t followed. The supplier said it instead opted for a ‘co-operative and facilitative approach’ rather than ‘reaching for the contract’.
The Court said that the supplier was in breach for not following the procedure and this did not assist the supplier in its defence of the claim for material breach for delay. Ultimately, damages were awarded against it.
The judgment of the Court in this case highlights the inherent danger of choosing to ignore the procedural requirements in a contract; it will make claims all the more difficult to successfully prove or defend. The more removed from the letter of the contract the parties conduct is, the more uncertain their legal positions. It is essential to properly manage contracts.
The Law Reform Commission has published an Issues Paper on Privilege for Reports of Court Proceedings under the Defamation Act 2009. The Paper examines and make recommendations on whether changes should be made to the Defamation Act 2009 relating to absolute privilege for reports of court proceedings. Section 17 of the Defamation Act 2009 currently provides that there is absolute privilege (i.e. complete immunity) from a defamation action where the claim is about a “fair and accurate report of proceedings” heard in any court in Ireland, Northern Ireland, or certain European and international courts.