What’s the damage?

BTO Solicitors recently marked the publication of the Information Commissioner’s annual report with a blog by two of their advocate solicitors about the Commissioner’s recent enforcement activity. BTO enjoyed a notable coup in 2013 by overturning the ICO’s £250,000 civil monetary penalty against Scottish Borders Council. I agree with the blog’s authors, Laura Irvine and Paul Motion, that the Borders case was hopeless; it is the low point in the ICO’s obsessive pursuit of “data breaches”. For several years, Wilmslow seemed to believe that [incident = breach] was a winning formula, and when tested in the Borders case, they were found wanting. The blog asserts that in several other cases, the ICO would equally have found it difficult to defend their CMPs, and again, I agree. Borders is not the only flawed CMP, and others could probably have been overturned.

Having said that, I think their review of recent action is eccentric, even myopic. They assert that the Commissioner “has not changed his approach to “likelihood” since the Scottish Borders appeal“, selecting two examples (Jala Transport and Bank of Scotland) to support their contention. I don’t know whether these two CMPs are sustainable, but they exemplify the difference between a one-off incident and an ongoing breach. I am certain that both are the latter. Jala’s *director* routinely carried the sole copy of his customer database on an unencrypted hard drive which he placed on the passenger seat of his car, while the Bank of Scotland proved incapable of preventing staff from sending faxes to the wrong destination even after the ICO started to investigate them. I think it’s instructive that neither organisation appealed.

Moreover, the argument that the ICO is on the same track is a lot easier to make if you stick rigidly to action taken in 2013, so that’s what Irvine and Motion’s blog does. There have only been 3 CMPs for Data Protection in 2014, and I believe that each would survive Tribunal scrutiny. As always, the incidents are eye-catching – an anti-abortion hacker gets access to the identity of women potentially seeking abortion, a police station is sold with evidence tapes identifying suspects, victims and witnesses, and a filing cabinet is sold with despite containing personal data about compensation payments paid to victims of terror attacks. However, I think it is likely that if BPAS did not properly maintain their website, it would come under attack from anti-abortion campaigners. It is likely that if Kent Police did not properly organise and monitor the clearance of their buildings, evidence would be left behind – and the same goes for the Department of Justice. In each case, the data was sensitive personal data, and to steal a word from BTO’s own blog, to argue that the loss of such data would not be likely to cause damage is frankly bizarre. The 2014 decisions may not be perfect, but they must have been made with the outcome of the Borders case in mind, and I think these three cases show a more robust process and defensible process at work.

The blog ends by considering Christopher Niebel’s successful appeal over the ICO’s £300,000 CMP for his industrial-scale spamming. It’s unlikely that anyone will mount a campaign larger than Niebel’s, which Judge Wikeley described as “a considerable public nuisance“, so the outcome of his appeal may effectively make the UK’s current PECR regime unenforceable. Wikeley suggested that had the bar been set lower (nuisance, rather than damage or distress), the outcome of the appeal might have been different. In response, the Government is currently consulting on whether to make precisely that change. BTO’s blog opposes this, fitting the Niebel case into the narrative of a wayward, overreaching Commissioner:

The likelihood of damage must be based on more than conjecture and distress has to be more than mere irritation. If evidential thresholds are getting in the way of monetary penalties the answer is to provide the requisite evidence, not to call for the lowering of the threshold and potentially criminalising conduct that is undeserving of such categorisation.

ICO’s use of conjecture is flawed and it’s what lost them the Borders case. But the above statement takes a seemingly ideological position that PECR breaches must go unpunished unless substantial damage can be established, without explaining why the law should not be used protect the public from intrusion and irritation. It’s not clear why Irvine and Motion are keen to keep a regime that lets spam go unpunished, and I’m convinced that leaving the threshold as it is will have that effect. Wikeley did not argue that ICO should have done a better job, but that the evidence wasn’t there to hit the target. By implication, with the test as it is, it won’t ever be. More importantly, neither the ICO or the DCMS (the department responsible for PECR) have suggested ‘criminalising’ any conduct. To claim otherwise is a red herring.

The sending of text messages, emails or automated calls without clear consent is already unlawful; the only debate is what the penalty should be for doing so. In wanting to keep the current threshold, Irvine and Motion seem more keen to protect the rights of spammers than the public. There’s a difference between criticising a poor case (Borders) and defending a target that no-one can hit. Damage and distress is not a concept that comes from the Directive – as Wikeley says, setting the bar there was a UK decision. The Directive demands ‘an effective, proportionate and dissuasive penalty‘ and Niebel shows that we don’t have one. Leaving the substantial damage threshold in place is not (as Irvine and Motion put it) “a realistic approach to assessment of the human consequences of data breaches and PECR breaches“; to do so ignores those consequences and by default, protects the illegal spam business model.

Like Irvine and Motion, I think the ICO approach is flawed and inconsistent. However, I support civil monetary penalties for breaches of both Data Protection and PECR and I think they should be maintained and improved. Evidence of the ineffectiveness of the criminal regime abounds. A few weeks ago, the Information Commissioner announced that they had successfully prosecuted Stephen Siddell, manager of an Enterprise car rental outlet in Southport. Mr Siddell was selling data about their clients to a claims management company. When the private sector is sometimes less forthcoming about their security problems than the public sector, Enterprise should be praised for calling the ICO rather than sacking their errant manager and keeping a lid on the problem. Mr Siddell was fined £500 (plus £300 in costs and victim surcharges). The claims management firm remains under investigation and so for the moment is not being named. Meanwhile, the Mail on Sunday reports today that Jayesh Shah, a man who boasted to an undercover reporter that he sent 500,000 spam text messages a day, has been fined £4000 for non-notification (plus costs of around £3000 in costs and surcharges) by magistrates in North London.

Mr Siddell’s future employment prospects are probably bleak, but with such small penalties, someone else will take his place. Police officers are treated fairly mercilessly when caught for data theft, but there is a still a queue of cops willing to raid the PNC. Meanwhile, though the comments about his weight and dress sense in the Mail’s comment section will have been unwelcome, Mr Shah can treat the £7000 outcome as an acceptable business expense. The criminal portion of the DPA provides scant punishment for data thieves (small fines and no criminal record as the offences are not recordable). It is possible for the ICO to issue enforcement notices against spammers and those who breach DP, but the only punishment for breaching an enforcement notice is the same paltry fines. A company prosecuted for breaching an enforcement notice can be closed down and replaced by a clean twin in next to no time.

I enjoy kicking the ICO as much as the next person, and their mishandling of CMP enforcement in recent years is a matter of concern. However, across the UK, Data Protection and privacy are still more honoured in the breach than the observance. There is big money to be made out of exploiting data, and as with health and safety, too many are willing to cut corners, regardless of the harm and distress that might be caused. Indeed, I think CMPs should be broken out of the security stranglehold and applied to damaging inaccuracy and unfairness as well. Rather than keeping the PECR threshold at an unattainable level, I think we should drop it to a straightforward tariff, with a flat rate penalty for every unlawful contact (say £1 per email, £5 per text and £10 per phone call). Post Niebel, private sector organisations that comply with the law will be priced out of the market by those who don’t unless there is a change. Without effective penalties, public sector organisations without a functioning privacy culture will continue to make decisions that put data – and in some cases, the public – at risk.

In their understandable enthusiasm to knock the ICO, I fear Irvine and Motion have lost sight of the purpose of the legislation. It is there to protect the public and to facilitate lawful, legitimate business activities. Personal data should be respected and handled with care. People have a right to a private and a home life without being pestered by spivs. The law and its implementation should penalise and deter misuse, intrusion and abuse. Some organisations will comply without sanction, but we need a strong, effective regime for those who won’t.

Comments

  1. Reblogged this on L8in and commented:
    #SnoopersCharter

  2. On the whole I’m closer to your take than theirs, but regarding your second paragraph…Scottish Borders wasn’t just a one off incident either, it was also an ongoing breach. They had no control whatsoever over the deletion of the data. They also allowed the records to be sent on unencrypted CD’s and you may recall the Tribunal infact accepted it was a serious breach. They were however, unable to construct a likely chain of events which would lead to damage as a result of the breach.

    So I think the challenge from BTO is how would the damage arise in the RBS/Java cases occur? Experts have already stated there wouldnt be an identity fraud issue with similar fields of data, so where is the credible sequence of events that not training staff on fax machines will lead to damage? An incident might be likely, but the damage?

    Perhaps if challenged on the above RBS/Java cases, the ICO would seek to rely upon the likelihood of substantial distress (not damage), an aspect that was oddly ignored by all parties in the Borders case.

    • To be pedantic, I didn’t say Borders wasn’t a breach. I said it was a hopeless CMP case and I stand by that. The ICO had a hypothetical argument for damage built entirely on a baseless assumption that data loss = instant fraud. The risk depends on the data. Worse than that, the Deputy Commissioner – as the Tribunal noted – didn’t properly distinguish between incidents and breaches. If you’re the kind of person who thinks undertakings are meaningful (I’m not), then perhaps Borders should have been asked to sign one of those. I think it should be CMP for breach that meets criteria (i.e. not Borders), enforcement notice for ongoing breach that data controller will not put right and that’s all.

      Damage in the Bank of Scotland case could happen if they faxed bank account details to the wrong place – it’s not what they faxed, but what the breach was likely to result in them faxing. ICO has asserted that you can use a passport number for identity theft, which is nonsense, but I can commit fraud if I know your account number etc.

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