Guernsey: Data Security – More Reasons To Be On Your Guard

Last Updated: 5 March 2018
Article by Sally French

Most Read Contributor in Guernsey, March 2019

The GDPR and cyber security threats are leading to heightened business vigilance regarding data. In the 10th of a series of columns for Compliance Matters by experts from Guernsey legal sector, Mourant Ozannes Senior Associate Sally French looks at a recent case involving Morrisons Supermarket, which highlights that data threats are not purely external matters, and that the cost of being in business is that you may be held liable for the acts of your employees.

We are seeing businesses placing an increased focus on data security and how they manage personal data. With the advent of the GDPR, and complimentary legislation being introduced in Guernsey and Jersey, the timing of this focus is natural. These concerns for businesses have been further heightened by growing publications of cyber security breaches.

In that context, a case marking a worrying combination of data protection and data security issues is the recent UK class action against Morrisons Supermarket. The case has some notable legal and commercial features:

  • Commercially;
    - It is a reminder that virtually all businesses hold some personal data. In this instance, the relevant data was employee payroll data.
    - Data security threats can be internal as well as external. The case concerned an intentional data leak perpetrated by a Morrisons' employee.
  • Legally;
    - The case was the first UK class action for a data security breach. We can expect more.
    - Morrisons were found to be vicariously liable, i.e. though no finding of fault was made against Morrisons it was nevertheless held liable for the acts of its employee.

Headline Facts

The case concerned the leaking of the personal payroll data of almost 100,000 Morrisons' employees. The leak was the result of deliberate, criminal action taken by a disgruntled Morrisons employee, Andrew Skelton. Mr Skelton leaked the data with the intention of damaging Morrisons.

Mr Skelton's role within Morrisons was as an IT auditor. In that role, Mr Skelton legitimately came into possession of the payroll details of over 100,000 Morrisons employees for the purpose of transferring the data from Morrisons secure system to its auditors. Harbouring resentment from an earlier disciplinary incident, Mr Skelton took steps to copy the payroll data onto a personal USB. He took that USB from the workplace and the data on it was leaked some months later using a false account created on a TOR network, accessed from his home computer.

On learning of the leak, Morrisons acted promptly to have the data taken out of public view so far as possible. It offered identity theft protection and compensation to anyone who suffered fraud as a result of the leak. Morrisons incurred costs in the region of £2million as a consequence of the incident.

No point was taken in the case regarding the appropriateness or speed of Morrisons' action. Nevertheless, 5,518 Morrisons employees brought a claim.


Primary liability claims, seeking to hold Morrisons liable for its own acts and omissions, failed. Morrisons was however held liable on the basis of secondary/vicarious liability. Morrisons was held accountable for the acts of its rogue employee, Mr Skelton.

Vicarious liability sees a faultless party held legally responsible for the wrongs of another. This can arise in a number of relationships, most commonly that of an employer being found liable for the wrongful acts of an employee.

The imposition of vicarious liability on employers is an imperfect compromise. It seeks to balance the social interest of giving victims a remedy against a party with the means to pay, against the risk of unduly inhibiting enterprise with additional costs. The cases show a preference towards the former.

There has been much debate as to how far an employee must stray from the scope of their employment before the chain of liability linking back to their employer will be broken. Criminality is not of itself sufficient to break the link between the employee's acts and the employer's liability. As neatly surmised by Lord Nichols of Birkenhead in Dubai Aluminium Co. Ltd. v Salaam [2003] 2AC 366:

" is a fact of life, and therefore to be expected by those who carry on businesses, that sometimes their agents may exceed the bounds of their authority or even defy express instructions. It is fair to allocate risk of losses thus arising to the businesses rather than leave those wronged with a sole remedy, of doubtful value, against the individual employee who committed the wrong."

The test applied by the courts in deciding when an employer is vicariously liable for the act of their employees is whether the wrongful act has a "sufficiently close connection with the employment".

The test is imprecise and case specific. As a consequence, the courts acknowledge that its parameters are unclear. However, attempts by the courts to over refine or specify criteria for determining the precise meaning of the term have been resisted. Rather, each case must turn upon its own facts, allowing the courts the latitude to consider the wide range of circumstances to be addressed which will necessarily vary considerably between one matter and another.

On the facts of the Morrisons case, Mr Skelton had taken calculated steps with the clear intention of doing his employer harm. His actions were criminal, and he is now serving a prison sentence as a consequence. He was in no way furthering the aims of Morrisons. He had taken data, later leaked it from his own non-work computer, outside of his employer's premises, in non-working hours. Nevertheless, the court concluded that Mr Skelton's rogue actions were sufficiently closely connected with his work to render Morrisons vicariously liable. Drawing upon the earlier criminal judgment against Mr Skelton, the court viewed his actions as "a seamless and continuous sequence of events" providing an unbroken thread linking the criminal acts to his employment.

The presiding judge, Mr Justice Langstaff, was troubled that Mr Skelton had set out to injure Morrisons and affixing vicarious liability to Morrisons may render the court an accessory in furthering Mr Skelton's criminal aims. No previous case had gone so far as to hold an employer vicariously liable for acts intended to harm that employer, rather than acts from which the employer may be said to benefit. However, when the attack on the employer sees other persons suffer the collateral damage, in this instance having their personal data leaked, it is difficult to see who else might be placed to compensate them. Morrisons do, however, have leave to appeal on this point.  


Widening the scope of vicarious liability may weigh upon any enterprise. The Morrisons case is a useful illustration of how the principles may apply in a data protection and data security context. A supermarket may not seem like the most obvious target for a data security attack but the case serves as a reminder that nearly all organisations will hold a quantity of sensitive data.

The case is also notable as having been brought as a class action. The introduction of the GDPR make it easier for such claims to be brought and provide individuals with a means of seeking redress which it may not be viable for them to obtain acting alone. There is certainly scope for more litigation of this type.

In the context of personal data, given Guernsey's adoption of the GDPR, it can be expected that the courts will uphold the principles underpinning the GDPR. One of the points of that regime is to protect individuals' data privacy. As such, the Guernsey courts would be expected to take a robust approach to see individuals are adequately protected by having access to compensation from an entity which may reasonably be expected to be adequately insured.

The GFSC in its role as regulator would also be expected to carefully scrutinise any breach impacting upon the regulated sector.


Invariably all organisations hold data. Much press attention has been devoted to considering the external threats of data hacks and cyber-attacks. These are serious concerns and organisations should be on their guard against them. But such vigilance against external threats should not divert organisations from considering internal threats. Any system which permits human access to data comes with the enterprise risk that such data may be mis-used, either intentionally or carelessly.

Where the data in question is personal data, the advent of the GDPR provides a valuable opportunity for organisations to review their systems. In doing so organisations should consider:

  • What data they hold;
  • If they need to hold that data;
  • What is the risk of holding that data;
  • If they are taking appropriate steps to protect that data from both internal and external risks; and
  • If they have a plan to respond in the event that something does go wrong and one of the data risks materialises.

An original version of this article first appeared in Compliance Matters, February 2018.

For more information about Guernsey's finance industry please visit

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.

In association with
Related Topics
Related Articles
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