UK: Cyber Attacks – An Existential Risk?

Last Updated: 3 May 2019
Article by Ben Pilbrow

Cyber attacks are the greatest threat facing advanced economies. So reported a 2018 survey of over 12,000 businesses, though in truth it is but one recent survey of many. The risk that cyber attacks pose is a fact that becomes less questioned with every retelling. But why is it so?

There is an easy answer to this question. Since the first electronic message was sent over the medium (rather longer ago than many people realise – on 29 October 1969), the importance of the internet has grown inexorably to the point that it touches upon almost every aspect of modern society. Seemingly overnight, the internet has attained such importance that any significant interference with its smooth operation risks catastrophe.

But, as with any issue as pervasive as this, there are many facets to the question. Where, for instance, lies the real risk? In the larger-scale attacks that overwhelmingly incapacitate and immobilise? Or in the combined volume of smaller attacks, which individually cause little damage, but collectively chip away at the fabric of our economy?

A recent survey, commissioned by Business in the Community, suggests that it is the latter that poses the far greater risk. Not only had a full quarter of the SMEs surveyed implemented no protections against cyber attacks, but 40% responded that they had taken no steps to update their cyber security strategies in the last 12 months. These findings seriously call into question the effectiveness of the protections in place in smaller business. Small wonder that the vast majority of cyber attacks are perpetrated against SMEs. Criminals, like any entrepreneur, tend towards the easiest markets.

However, another argument takes the opposite view, and suggests that it is not this more mundane brand of small-scale cyber criminality that is driving businesses to identify cyber attacks as the greatest threat facing advanced economies. Although it is not a fact acknowledged by the traditional heist movie, SMEs were the easiest market for enterprising criminals long before the advance of the internet into society. And in return, SMEs always have, and still do, rely upon herd protection against this threat. Where that herd protection proves insufficient for society as a whole, SMEs evolve to rebalance the risk, whether through better individual (i.e. cyber security) or collective (i.e. policing) protections.

Why then must it be the large-scale cyber attacks that form the foundation of the perceived risk? Perhaps unsurprisingly, the answer lies in the differences that the internet has introduced into modern society. The information revolution has massively reduced barriers to interaction. The electronic automation that allows you to shop on a different continent at 3 am is the same automation that now allows an orchestrated, large-scale cyber attack to far outlive the confines of its original purpose. The geographic incidence of the NotPetya attack in 2017, for instance, has led a number of experts to suggest that it was created by, or at least with the sanction of, the Russian government, who intended to use it in its conflict against Ukraine. And yet, the nature of the virus meant that it quickly exceeded these bounds, causing significant damage to businesses and industries worldwide.

Clearly, herd protection provides no protection against a large-scale cyber attack: it is a contagious infection rather than targeted predation. Proximity, the key to herd protection, only enables the attack rather than protecting against it. How, therefore, can businesses protect themselves against the risk of these sorts of large-scale cyber attacks?

Clearly, the most obvious answer is cyber security. Commentary on the recent Business in the Community survey has focused on the proportion of SMEs not implementing or updating cyber security measures. However, commentators tend not to report on the significant efforts that most businesses, particularly large enterprises, have expended on improving their cyber security. 'Company updates cyber security measures, which appear to be working' simply does not make good copy.

The less obvious answer is insurance. It has been possible to insure against the risks that cyber presents since the late 1990s. For many years, few companies purchased policies, whether because at that stage cyber security did not pose (or had not yet been recognised to pose) a significant risk or because the policies on offer contained significant exclusions. However, the cyber security insurance market has both matured and grown significantly since that point. Indeed, for SMEs, the cyber security insurance market has been the fastest growing market in recent years.

However, like the threat it seeks to mitigate, the cyber security insurance market remains embryonic. Insurance companies have made and continue to make strenuous efforts to understand the cyber security risk, but it is new and ever changing. Logically, this fact should undermine the effectiveness of cyber security insurance as a potential solution for companies. And indeed, recent activity bears out this deduction.

DLA Piper has recently initiated proceedings against its insurer, Hiscox, over its refusal to pay out on DLA Piper's claim arising out of the Petya ransomware attack. It was widely reported at the time that DLA Piper's servers and computers had been heavily infected by the virus, wiping out emails and telephones for 3,600 lawyers in 40 countries for two days. The blackout meant that lawyers at the law behemoth could not access documents and had to postpone work.

The dispute underlines the difficulty that businesses face in trying to control their exposure to cyber attacks. The cyber threat itself is hardly new. Robert Morris accidentally released the first 'denial of service' worm in 1988, which is widely regarded as the first 'cyber attack' – though the fact he did so inadvertently does somewhat undermine the description. However, with the introduction of the internet of things, and the increased connectivity that this brings, the cost of the risk rises inordinately. It is the novelty of that change which means that the cyber battleground, both between criminals and businesses, and between businesses and insurers, will be a disorienting place for some time to come.

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 Mondaq.com.

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

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Practice Guides
by Mondaq Advice Centres
Relevancy Powered by MondaqAI
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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

Mondaq.com (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 www.mondaq.com

To Use Mondaq.com 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.

Disclaimer

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.

General

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