European Union: What To Do In A Hacking Crisis

Last Updated: 23 July 2018
Article by Hugo Plowman and Sofia Berggren

On a Saturday morning, the day after the General Data Protection Regulation (GDPR) came into effect, we received a call from one of our clients. The client's computer systems had been hacked the night before. To make matters worse, it was the spring bank holiday weekend and the IT company which serviced the client was not contactable.

It is no surprise that hackers and fraudsters deliberately target businesses when they are most vulnerable. It is not in a hacker's nature to courteously wait for the CEO to return from his holiday – nor do they schedule the hack between 9 am and 5 pm on a weekday. In fact, they often keep close track on employee working hours and practices to pounce when the office is closed or when senior management is away.

In this case, the client had been hacked on a Friday night after everyone had clocked off for the bank holiday weekend. The client had also outsourced some of its IT services to a company that was not contactable after business hours. The hacker had undoubtedly taken this into account and planned his attack, anticipating when the business would be less able to defend itself. The hacker may even have hoped that the intrusion would be undetected until the employees returned to the office after the bank holiday.

Our client was concerned about its new reporting obligations following the introduction of a regulation in EU law on data protection and privacy. As a regulation, and not a directive, the GDPR does not require national governments in the EU to pass any enabling legislation. It is directly binding. However, the UK has enacted the Data Protection Act 2018 (DPA) with the main purpose of implementing the GDPR in preparation for our withdrawal from the EU next year. The DPA gained royal assent on 25 May 2018, the day before the hack.

All organisations are now required to report certain types of personal data breaches to the Information Commissioners Office (ICO) within 72 hours of becoming aware of the breach. This tight timeframe may prove unrealistic in the context of a sophisticated hacking incident. The first golden 24 hours after a breach are the most crucial and must be spent focusing on securing evidence, protecting the business and the data, identifying who has launched the attack and how to stop it. It can be difficult simultaneously to figure out if a report needs to be made to the ICO or affected data subjects. It may be impossible to know what sensibly to include in a report without first undertaking the investigation. Indeed, the investigation itself may take longer than 72 hours.

Here, it is important to note that the obligation to report within 72 hours is required "where feasible". If more than 72 hours is required to investigate and take action, it is permissible to postpone reporting as long as you can provide reasons for the delay. However, notifying the ICO does not mean that the internal investigation must cease. In our line of work especially, it is easy to envisage a situation where a business would want to investigate with sufficient rigour to be able to take court action against, say, a departing employee for stealing confidential client data. The ICO, and its staff, has confidentiality obligations under the DPA which should ensure that any reports made to the ICO are kept confidential.  

Although there is leeway to delay reporting in some circumstances, it is important to take the reporting requirement under the GDPR or DPA seriously. A failure to notify a breach can result in a significant fine of up to €10 million or 2% of a company's global turnover, whichever is higher. A robust breach-reporting system must be put in place to ensure that you can detect a breach and that you are able to provide all the necessary details to the ICO.

In fact, the GDPR also sets out what you must include when reporting a data breach. You must include the nature of the personal data breach, including (where possible) the categories and approximate number of the individuals and personal data records concerned, the name and contact details of your organisation's data protection officer (if you have one), a description of the likely consequences of the breach, a description of the measures taken or to be taken to deal with the data breach and any measures taken to mitigate any possible adverse effects of the breach. This may not always be an easy task. The GDPR does allow you to provide this information in phases. However, the information must still be provided without undue delay. This means that the ICO expects you to prioritise the investigation, give it adequate resources and expedite it.

In the end, our client was able to stop the hacker's access. The process of identifying the culprits and seeking recoveries continues. As hackers become more sophisticated, fortunately so have the methods we employ to detect and bring them to justice.

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.

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