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Cybersecurity: Legal implications and risk management

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In an increasingly interconnected world, cyber risk is firmly at the top of the boardroom agenda, and having an effective data breach response programme is no longer optional.

Cybersecurity crisis management

The internet knows no borders, neither do we. Our global team of cybersecurity response experts work across borders, combining data protection, privacy, regulatory, white collar and litigation expertise in order to deliver seamless crisis management and legal advice, whenever and wherever needed.

The digitalization and free flow of information has transformed global business. However, with increased opportunities have come new and increased risks, together with complex legislative regimes that can vary significantly by jurisdiction, and are constantly evolving. Even the most conscientious company can become the victim of a cybersecurity incident, such as the stealing of client or company information, or a ransomware attack. We work with a wide range of multinational companies to manage their cybersecurity risks, developing rapid response plans, providing time-critical crisis management advice, and working with clients to manage any resulting legal issues that may arise. 

Key issues

Why?

  • Reputation
  • Fines
  • Breach of contract
  • M&A due diligence
  • Insurance
  • Proprietary information
  • Litigation
  • Criminal offences
  • Negligence

Be prepared

Risk Assessment

  • Key Information
  • Assets
  • Key Systems
  • Threat Analysis
  • Security Measures

Toolkit

  • Scripts
  • Internal and 
    External
  • Communications
  • Employee contacts
  • Response Plan
  • Live Training
  • Business Continuity Plan

Key considerations

Customer/individual rights

  • Requests for data
  • Data Protection Authority Complaints
  • Group litigation orders
  • Resolution mechanisms

B2B relationships

  • Contractual obligations
  • Contractual liability
  • Tort

Reputation management

  • Media strategy
  • Customer interaction
  • Employee engagement

Commercial

  • Proprietary
  • Information/Trade Secrets
  • System Disruption

Regulatory issues

  • Data Protection Authority
  • Financial Regulators
  • Market authorities
  • Other regulators

Privacy & data protection

  • Jurisdictions involved
  • Reporting obligations
    • individuals
    • authorities

Evidence

  • Law Enforcement Involvement
  • Legal Privilege
  • Preservation of Evidence

Response

Crisis Team

  • Legal (internal and external)
  • IT/IT Forensics
  • PR
  • Regulatory
  • DPO
  • Executive committee
  • HR
  • Vendor manager

Key Actions

  • Work with forensic investigators to:
    • Identify and contain breach
    • Gather/preserve evidence
    • Maximise legal privilege coverage
  • Contact crisis team
  • Bring in external partners
  • Identify key risks and priorities based on nature of breach
  • Assess notification requirements
  • Communications
  • Regulatory notifications

 

Articles

Legal 500's In-House Lawyer Magazine Autumn - Commercial Litigation Focus (Germany)

In The Legal500's newly released In-House Lawyer Magazine a group of White & Case lawyers has contributed a legal briefing on trends in German commercial litigation.

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AAA plc & ors v Persons Unknown: Cyber Activism or Blackmail?

In recent years, demands for payments in cryptocurrencies have become the ransom of choice for cyber extortionists and other online frauds. As a result, the English Court's powers are increasingly being called upon.

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Time to Revisit Risk Factors in Periodic Reports

Ninth Circuit Decision Highlights Importance of Updating Risk Factors to Address Material Developments, including those relating to Cybersecurity Risks.

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Cybersecurity Enforcement: New York Department of Financial Services issues first penalty under Cybersecurity Regulation

Consistent with its increasing activity in the cybersecurity enforcement space, in March 2021, the NYDFS issued its first penalty under the Cybersecurity Regulation. This client alert explores the settlement and offers takeaways on the areas of focus by the NYDFS in enforcement actions under the Cybersecurity Regulation.

Compensating non-material damages based on Article 82 GDPR

Is a data subject entitled to compensation from a controller or processor if the data subject's GDPR rights have been infringed, even if they have not suffered any kind of material damage? 

Corporate Boards Must Ask Key Cybersecurity Questions

Cybersecurity has been a mainstay of quarterly board agendas for years.

Cybersecurity Risk: Top 5 strategies to build resilience

The fourth webinar in our 2020 Autumn Webinar Series covered crucial steps you should be taking to protect against cybersecurity threats and what you should do when disaster strikes.

Before the Dust Settles: The California Privacy Rights Act Ballot Initiative Modifies and Expands California Privacy Law

Hot on the heels of the California Attorney General's rulemaking process for the California Consumer Privacy Act ("CCPA"), California voters have passed a ballot initiative to expand and create new privacy rights for consumers.

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US Cybersecurity Standards to Get Tougher and More Specific

In the past few years, cybersecurity has taken on increasing importance in the eyes of lawmakers and regulators.

Data Sharing Without Borders

UK law enforcement can now obtain an order against a person in or operating in the US for the production of or access to electronic data under a new ‘landmark’ US-UK data sharing agreement.

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Responding to a cyber-incident

The COVID-19 crisis has exposed many companies to more cyber threats. Tim Hickman and John Timmons discuss what businesses need to do should a major incident occur.

Trending: Legal protection for cryptoasset stakeholders

Recent decisions in Singapore and New Zealand confirm that the courts are prepared to act to provide greater certainty and support to stakeholders in cryptoassets.

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Recovering the ransom: High Court confirms Bitcoin status as property

The High Court has determined that Bitcoin (and other similar cryptocurrencies) can be considered property under English law, and could be the subject of a proprietary injunction. The Court granted the injunction to assist an insurance company to recover Bitcoin that it had transferred in order to satisfy a malware ransom demand.

Navigating Privacy and Cyber Incident Notification and Disclosure Requirements

Organisations are facing increasing uncertainty in assessing global notification and disclosure obligations and making a determination of whether to notify or disclose a privacy violation or security incident in today's complex regulatory environment. This article offers six steps companies should consider when navigating this complex process.

Proposal on the Application of the NIS Regulations post-Brexit

This article examines the impact of the UK Network and Information Systems Regulations 2018 (SI 2018/506) (NIS Regulations) on organisations post Brexit and their obligations under applicable cybersecurity law.

Contacts

Responding to a cyber-incident

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5 min read

World in Transition

Our views on changing dynamics in energy, ESG, finance, globalization and US policy.

The speed of response is vital; as much information as possible must be gathered in the very early moments to understand what information and systems have been compromised.

The COVID-19 crisis has exposed many companies to more cyber threats. Tim Hickman and John Timmons discuss what businesses need to do should a major incident occur. 

 

Q: What impact did lockdown have on companies’ exposure to cyber-threats?
A:
Organisations had to rapidly adopt new systems, processes and procedures to accommodate remote working, and aggressively roll out existing solutions not widely used pre-lockdown. With everybody suddenly operating from home, patterns of work, and therefore network usage, changed too. The attack vectors changed, as did the points of weakness in organisations’ information security. All this had a major impact on risk and management of cyber-threats. The sheer speed at which organisations had to adapt meant many did not have the time to do their standard diligence on providers and suppliers, which led to the deployment of solutions based on incomplete information and the possibility of latent security flaws. If these issues are not picked up quickly and acted upon, organisations are susceptible to problems down the line and greater exposure to cyber-threats.

Q: If a major incident does occur, what are the immediate steps an organisation should take to respond?
A: It’s something every executive fears: that call in the middle of the night saying that there has been a major cyberincident. The speed of response is vital; as much information as possible must be gathered in those very early moments to understand what information and systems have been compromised. Has this happened before and does it indicate a systemic issue? What is the risk to the organisation, its reputation and its customers? Establishing that initial snapshot assessment is incredibly important as it will drive not only the prioritisation of the response, but the entire process. If an incident is correctly identified as high risk at the onset, the response timeline will accelerate, with organisational resources deployed more appropriately.

Q: Once that initial risk assessment is complete, what should happen next?
A: Principally, it’s about damage limitation and controlling the incident, so understanding the mitigating factors that might help to reduce risk to the business is key. If information has been lost or stolen, for example, was that information subject to encryption? Is it in a format that would be useless to a third party? Did the incident involve theft of a device that has since been recovered? If, following that risk assessment, you conclude that it is a major, high-risk incident, then the response must be fast. It may be necessary to first internally escalate by notifying the executive committee or wider board. External legal counsel should be involved as early as possible so they are on call to respond whenever needed throughout the incident. Engaging legal counsel has the added benefit of establishing privilege in certain circumstances, which can protect sensitive discussions from future disclosure should there be an investigation or litigation. Forensic IT experts are also an essential part of the damage limitation process, particularly in identifying the threat, understanding what went wrong and taking the appropriate measures to stem the tide. Regulators need to be informed as soon as possible, as should affected individuals, where organisations are legally required to do so.

Q: What elements of response are sometimes overlooked?
A: Public relations plays an often overlooked, but absolutely crucial, role in controlling the narrative and allowing the organisation to present the best and most accurate representation of the incident. At each stage of the response process, it is also vital to preserve evidence and record details of every action and decision that was made. You may look back and determine that, in hindsight, poor decisions were made, but if you can show precisely what information guided those decisions at the time, it can be beneficial in the event of an investigation or litigation. Of course, excessive retention of records and information can also present challenges, but legal counsel will be able to assist in striking the right balance.

Q: How does White & Case support companies in this important area?
A: Cybersecurity incidents do not respect national borders. Companies are often affected in multiple jurisdictions, with different regulators and laws in relation to disclosure obligations and timeframes. White & Case’s global Cyber Incident Response team has extensive experience working with clients that have a multi-jurisdictional footprint. While we work with these clients through all stages of the preparedness, response and review process, we are uniquely positioned to assist during the critical incident response phase. This is due to our global presence and cross-disciplinary team of cyber-experts who are constantly collaborating with each other and with PR, IT forensics, internal compliance and incident response teams, helping to deliver crisis management and legal advice whenever and wherever it is needed.

 

Click here to download 'Responding to a cyber-incident' PDF

 

This article was published in a slightly different form in Raconteur’s "Business Continuity and Growth" special report, The Sunday Times, on 2 August 2020. For more information please visit
whitecase.com/cybersecurity.

This publication is provided for your convenience and does not constitute legal advice. This publication is protected by copyright.

 

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