Data Disaster? How A Lawyer Can Help After A Cyberattack

Posted On - 28 May, 2024 • By - King Stubb & Kasiva

Introduction

In today’s digital era, the surge in cybercrime has created a complex landscape for businesses worldwide. Cyberattacks are increasingly complex and sophisticated, targeting sensitive data and critical infrastructure, and can result in severe financial and reputational damage. Navigating this requires prompt and expert legal assistance. Legal professionals are essential for both businesses and victims to ensure regulatory compliance, preserve evidence, manage breach responses, and mitigate liabilities.

Understanding the Legal Issues

When a company experiences a cyberattack, involving a lawyer promptly is crucial to navigating the complex legal landscape. The key legal issues to consider are as follows:

Regulatory Compliance
- Incident Reporting: Many jurisdictions mandate reporting cybersecurity incidents within a specific timeframe. For example, the EU’s NIS 2 Directive^[1] requires cyber-incident reporting within 72 hours, while CERT-In in India mandates reporting certain incidents within six hours.^[2]
- Data Protection Laws: Laws like the EU’s GDPR^[3] and India’s Digital Personal Data Protection Act, 2023 (DPDPA)^[4] require companies to notify data protection authorities and affected individuals about data breaches.
- Sector-Specific Regulations: Various industries, such as healthcare and finance, have additional regulatory requirements that must be adhered to after a cyberattack.
Contractual Obligations
- Customer and Supplier Contracts: Contracts may include specific clauses regarding data security and breach notifications. Failure to comply can result in breaches of contract, leading to litigation and financial liabilities.
- Service Level Agreements (SLAs): SLAs with third-party service providers often include terms related to cybersecurity. Understanding these terms is essential to managing post-attack responsibilities and claims.
Litigation and Liability
- Class Action Lawsuits: Cyberattacks can lead to lawsuits from customers, employees, and shareholders, especially if the breach results in significant financial losses or drops in stock price.
- Negligence Claims: Directors and officers may face personal liability for negligence or breach of fiduciary duty if they fail to implement adequate cybersecurity measures or mishandle a breach response.
- Regulatory Fines and Sanctions: Non-compliance with cybersecurity laws can result in heavy fines, such as penalties under the GDPR in the EU or the IT Act, 2000 in India^[5], which can range from thousands of rupees to imprisonment.
Insurance and Indemnity
- Cyber Insurance Policies: Reviewing the terms of cyber insurance to understand the coverage for incident response, remediation, legal fees, regulatory fines, and business interruption is crucial. Here, it is important to ensure compliance with policy conditions to avoid denial of claims.
- Indemnity Clauses: It is important to examine indemnity clauses in contracts with third parties to determine liability and financial responsibility for cybersecurity breaches.
Government and Regulatory Investigations
- Audits and Inquiries: Cyberattacks often trigger government audits and regulatory investigations. Cooperating with authorities and providing accurate information is crucial to mitigate further legal complications.
- CERT-In Directions: In India, entities must comply with CERT-In directives, including maintaining logs, system clock synchronization, and providing requested information promptly.^[6]
Data Protection and Privacy Obligations
- Data Fiduciary Responsibilities: Under laws like the DPDPA, data fiduciaries must implement reasonable security measures to protect personal data and conduct data protection impact assessments for high-risk processing activities.
- Breach Notification: It is required to notify affected data principals and relevant authorities about personal data breaches as required by law to avoid penalties and further legal action.

Need for Legal Assistance in Cybercrime Matters

Owing to the complexities of cybercrime and the evolving legal landscape, it is crucial to seek legal assistance in cybercrime-related matters.

Understanding the Legal Landscape: Cybercrime can involve a complex interplay of laws and regulations related to data privacy, national security, intellectual property, and financial crimes. Legal professionals can help navigate these complexities and identify the applicable laws in the specific case.
Preserving Evidence: Digital evidence in cybercrime cases is often fragile and requires careful handling. Legal counsel can advise on the proper collection, preservation, and presentation of evidence to ensure its admissibility in court.
Reporting the Crime: Deciding whether and how to report a cybercrime can be a difficult decision. Lawyers can advise on the appropriate authorities to report to, such as law enforcement agencies or CERT-In, depending on the nature of the crime.
Building a Strong Case: Whether it is a victim seeking compensation or an organization facing legal action, building a strong case requires expertise in digital forensics and legal strategy. Lawyers can work with investigators to gather evidence and build a compelling case.
Negotiating with Attackers: In some cases, cybercriminals may demand ransom payments or threaten further attacks. Legal professionals can guide through negotiations and advise on safe and legal strategies for dealing with the attacker.
Compliance with Regulations: Organizations must comply with various data security and breach notification regulations. Lawyers can help ensure compliance and advise on best practices for mitigating cyber risks and responding to incidents.
Mitigating Reputational Damage: Cyberattacks can severely damage an organization’s reputation. Legal counsel can help develop a communication strategy to minimize the impact on stakeholders and rebuild trust.

King Stubb & Kasiva’s (KSK) Expertise

KSK positions itself as a leading data protection law firm in India, offering dedicated Data Protection and Data Privacy services^[7] including:

Compliance with Data Protection Laws: The team of seasoned attorneys at KSK provides holistic legal guidance to ensure compliance with data protection and privacy laws. This includes advising on regulations, conducting privacy impact assessments (PIAs), and developing policies and procedures.
Data Breach Response
Data Transfer and Cross-Border Issues
Privacy Litigation and Dispute Resolution
Data Processing Agreements
Employee Privacy
Vendor and Third-Party Due Diligence
Data Subject Access Requests (DSARs)
Data Mapping and Inventory

Conclusion and Looking Forward

The dynamic cybercrime landscape demands proactive legal strategies. Businesses need to understand complex data breach legalities and have a trusted legal partner on hand. Early engagement with legal counsel minimizes legal risks, ensures compliance, and helps navigate post-attack complexities. Moreover, legal guidance empowers victims of cybercrime to understand their rights, seek compensation, and hold perpetrators accountable. As cybercrime evolves, a united front of businesses and victims, backed by strong legal representation, is critical to combat this growing threat.

^[1] https://digital-strategy.ec.europa.eu/en/policies/nis2-directive#:~:text=The%20NIS2%20Directive%20is%20the,of%20cybersecurity%20in%20the%20EU.&text=The%20EU%20cybersecurity%20rules%20introduced,came%20into%20force%20in%202023.

^[2] https://www.cert-in.org.in/PDF/CERT-In_Directions_70B_28.04.2022.pdf.

^[3] https://gdpr.eu/what-is-gdpr/.

^[4] https://www.meity.gov.in/writereaddata/files/Digital%20Personal%20Data%20Protection%20Act%202023.pdf.

^[5] https://www.indiacode.nic.in/bitstream/123456789/13116/1/it_act_2000_updated.pdf.

^[6] https://www.cert-in.org.in/PDF/CERT-In_Directions_70B_28.04.2022.pdf.

^[7] https://ksandk.com/practice-areas/information-technology-law-firm-in-india/data-privacy/.

King Stubb & Kasiva,
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