Australia: 5 key actions your business can take to manage data breach risk

Data breach incidents are an unfortunate reality of 21st century life. A recent study of data breach incidents in Australia found that, on average, a cyber breach costs business $2.82 million to rectify1.

Apart from the financial costs, there are other compelling reasons why businesses should take data breach management seriously. Not to mention that the Federal Government has just released a draft bill that would require businesses to notify the Federal Privacy Commissioner and affected individuals of serious data breaches involving personal information. Read more here.

You can take steps to protect your business from data breaches and reduce their impact if they occur.

In this article we outline five actions to better data breach management. Following these steps will also help your business comply with the Privacy Commissioner's voluntary guidelines on data breach notification, and prepare for the potential introduction of mandatory notification requirements in Australia.


It is essential the decision makers in your business understand (and monitor) the types and amount of personal information that the business holds, and how/where that information is stored.

Under the Privacy Act, entities are responsible for the security of any records containing personal information (whether physical or electronic) that are in the entity's possession or control. This can include information that is processed or stored by external service providers (including cloud storage providers). Particular care should also be taken to identify and manage archived and backup copies of data.

Your business' risk and compliance governance procedures should incorporate regular reporting on information security and data storage issues so that management has appropriate visibility of any risks and can take a co-ordinated approach to manage them. These matters should be reported on at the most senior levels of governance in an organisation.


Your business should have appropriate operational procedures (and contractual rights) in place so that you can promptly and accurately identify and assess any security breaches affecting your data, regardless of whether the breach is suffered by you or your service provider.

Ideally, contracts should include a clause requiring the service provider to immediately notify the customer of any security breaches affecting the customer's data, and to co-operate with the customer in connection with the management of the breach.

You should also seek to ensure that the contractual trigger for notification operates on an objective basis, and is not subject to an assessment of severity by the service provider.

The cost of managing data breaches should also be addressed in the contract. The contract should include appropriate liability positions, indemnity obligations and insurance requirements.


The Privacy Commissioner recognises that it is not possible (nor required under the Privacy Act) for businesses to design completely impenetrable security systems. Rather, organisations are required to implement information security measures that are "reasonable" in the circumstances (based on factors such as the nature of the business and the amount and sensitivity the personal information held).

The Privacy Commissioner says that determining whether a reasonable security measure has been put in place should not be judged solely by reference to the expense of the implementation.

A good information security program should incorporate both proactive and reactive risk management – it should:

  • help you to prevent unauthorised access/disclosure or loss of data (e.g. firewalls, network security, malware detection and prevention software); and
  • reduce the risk posed to affected individuals when breaches do occur (e.g. passwords, data encryption and database segregation techniques, which make it more difficult for hackers to use data extracted from your systems).

Implementing sufficiently strong reactive security measures (such as an adequate level of data encryption) could potentially save you from having to notify, as the proposed Australian data breach notification regime would allow businesses to consider factors such as "whether the information is in a form that is intelligible to an ordinary person" and "whether the information is protected by security measures" when determining whether a data breach is "serious" (thereby triggering the notification requirement).


It's critical to identify data breach incidents quickly so that remedial steps and notifications can be performed in a timely manner. The notification requirements under the proposed mandatory data breach notification regime will apply to any serious data breaches that the organisation "ought reasonably to be aware of".

Businesses can consider breach detection measures such as:

  • network security tools, which act as a "security alarm" for your IT systems (e.g. intrusion detection software to monitor unauthorised access, and data loss prevention software to scan outbound e-mails sent by staff);
  • regular security testing to identify potential weak spots – this could include technical testing (such as network penetration testing) and operational readiness testing (such as training exercises for staff that simulate phishing attacks); and
  • training for staff to identify and report errors in handling personal information.


Your business should have a clear data breach plan in place that sets out a strategy for identifying and remedying the source of a data breach. The plan should also identify key responsible personnel, and set out the procedures for determining whether notice should be given of the breach.

A good starting point in designing the plan would be to refer to the Government's draft bill on the proposed mandatory data breach notification regime. The Privacy Commissioner has also published a range of guidance materials on data breach management, and is currently in the process of public consultation on a draft Guide to Developing a Data Breach Response Plan (although it should be noted that the consultation draft of the Guide was released prior to the draft bill, and so does not currently reflect the proposed mandatory data breach notification regime).

Businesses should also consider having a list of "go-to" subject matter experts that can be engaged at short notice to assess the severity of the breach, advise on steps on containment and risk mitigation and determine whether notification is required.

You may also like to read our related articles:

Mandatory data breach notification is coming to Australia

General Counsels' top priority for 2016: Managing cyber security



The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Most awarded firm and Australian deal of the year
Australasian Legal Business Awards
Employer of Choice for Women
Equal Opportunity for Women
in the Workplace (EOWA)

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions