Australia: Limelight Issue No. 68: Cyber security: Insurers and law firms at risk of cyber-attacks

Issue No. 68

  • Insurers and law firms at risk of cyber-attacks
  • Practical tips for protecting you
  • Lawyer fined following mishandling of client
  • files – storage on home computer


In the wake of several recent global cyber-attacks, the insurance and legal markets must recognise vulnerabilities in work practices and take steps to protect sensitive client information. This requires a fundamental change in attitude towards the way electronic data is managed, noting the increasing risk of causing reputational and financial damage to both individuals and companies.

Dangers of poor data management

Important lessons can be learnt from recent action taken by the UK's Information Commissioner's Office to fine a senior barrister for her failure to maintain security over sensitive client files1.

The barrister created and stored some 725 files on her home computer, which contained sensitive personal information belonging to between 200 and 250 people, including children. Although the desktop computer was password-protected, the files were unencrypted, and were accessible to shared users of the terminal.

The files were inadvertently and temporarily added to an internet directory as a back-up when the barrister's husband updated software on the home computer. Several of the files could be accessed through internet searches, and some of the uploaded material contained information relating to persons involved in Family Court and Court of Protection proceedings.

The barrister's conduct – both in relation to failure to prevent access to files by unauthorised third parties, and an ongoing failure over 2 years to encrypt the files – was found to be a serious contravention of the relevant data protection principle under the UK's Data Protection Act 1988.

The Commissioner considered that there was no good reason for the barrister's failure to take reasonable steps to prevent the contravention. It was foreseeable that the failure to technically protect the information would have caused substantial distress to clients, particularly were the files could have been accessed by untrustworthy third parties, and she was fined Ł1,000.

Vulnerabilities in legal & insurance firms

Closer to home, lawyers and insurers should be on high alert following the recent crippling of global law firm DLA Piper by the recent NotPetya ransomware attack.

As cybercriminals become increasingly sophisticated, companies such as law firms and insurers2 which store highly sensitive personal client information will become more frequent targets.

The costs of such attacks are varied and significant – not only can there be exposure to penalties under the recently established nationwide data breach notification scheme under the Privacy Amendment (Notifiable Data Breaches) Act 2017 (Cth), but affected entities are likely to incur:

  • costs of complying with the new legislation
  • losses in access to data, as well as lost data or information through corruption or encryption
  • costs associated with restoring systems and functionality
  • ongoing losses in productivity and profit
  • reputational damage and loss of trust from clients
  • costs of corrective action, including potential civil claims for damages

Whilst many firms and insurers are sophisticated in their level of infrastructure and cyber-defences, each is exposed to risk where there has not been emphasis on education and training for staff in dealing with electronic information. Staff must be made aware of the various ways cybercriminals may endeavour to access data, including phishing, ransomware and access through unsecured personal devices.

Means of protection

In addition to investing in secure IT systems, legal and insurance entities can take several measures to protect themselves and staff members from malicious cyberattacks.

  • Maintain up-to-date software (including operational and anti-virus software) to minimise exposure to known vulnerabilities that will be targeted by cybercriminals
  • Invest in frequent and extensive back-ups so that systems can be restored with minimal loss of data in the event of unwanted encryption or ransomware attacks
  • Ensure staff passwords are sufficiently strong and, where possible, employ two-factor authentication for access to sensitive systems
  • Limit staff access to sensitive or operational information and, as a matter of business practice, require multiple levels of authorisation to limit security breaches going undetected
  • Upgrade data management policies to discourage practice of risky behaviour, such as storage of company or client information on personal devices, or connection of unsecure personal devices to company networks
  • Take out necessary cyber-risk and data breach insurance
  • Test staff awareness and understanding of risk by controlled exposure to potentially malicious electronic content (e.g. send fake phishing email to selection of random staff to assess responses)

Staff should be thoroughly educated in relation to cyber risks (both existing and emerging), with an emphasis placed on adopting good practices within both their work and home environments. This is particularly so where increased sharing of networks and devices mean the lines between company and personal data are often blurred.

Individuals should be trained to:

  • use password managers with two-factor authentication to avoid using weak or replicated passwords
  • hover over suspicious links to ensure authentic origins
  • limit publicly accessible identifying information (such as dates of birth or addresses)
  • be wary of text message authentication where mobile phones can be easily cloned
  • use strong antivirus software on home computers
  • be wary of letter, email and telephone scams, particularly for older or less technologically savvy individuals.


Recent global attacks have seen cyber security thrust into the spotlight. With increasing digitisation of the legal and insurance industries, it is now more crucial than ever for lawyers and insurers to recognise vulnerabilities in their systems and business practices, so as to ensure the safekeeping of sensitive client data.

Individuals and corporate entities will be exposed to extensive reputational and financial damage where reasonable steps are not taken to meet foreseeable cyber risks.



2 Global Cyber Executive Briefing (Insurance) -

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.

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.

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”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.