Confronting the Legal Liabilities of IT Systems

Abstract

The legal liability resulting from data breach or un-authorised information disclosure is emerging as a threat to the financial stability of many business. Recent studies and court cases are demonstrating that poorly maintained information systems, a lack of security polices and procedures have resulted in awarding victims large settlements. Professional firms with a responsibility to protect client confidential information are being victimised by criminal hackers and a growing militant activist sub-culture. Insurance companies, activist share holders and identify theft victims are exerting tremendous pressure on victimised business to demonstrate a level of care and concern for personal and proprietary data. So, what happens when it all goes completely wrong? Firms will be called upon to demonstrate that “reasonable care” had been taken to secure the disclosed information and the disclosure was not foreseeable. Failure to patch and update systems and maintain robust security against cyber-attacks can have severe financial and reputation consequences.