South Carolina Lawyers are YOU Ready for the GDPR?

With the European Union’s (“EU”) General Data Protection Regulation (“GDPR”) set to take effect on May 25, 2018, the time is now(yesterday really) to consider how this law will affect many aspects of your relationship with your clients and how your practice operates.  Before discussing the major topics within the GDPR, it is important to define several terms that exists within the GDPR Framework. (Note: Article References are to the GDPR text[1])

Key Terms
Controller – As defined in Article 4(7) and described further in Article 26 a “Controller” is the natural or legal person, public authority, agency or other body which, alone or jointly with others, determines the purposes and means of the processing of personal data; where the purposes and means of such processing are determined by Union or Member State law, the controller or the specific criteria for its nomination may be provided for by Union or Member State law. 
Data Subject – For the purpose of discussing the GDPR, a “Data Subject” is an individual that is a citizen of the EU, or that resides in an EU Member State.
Processor – As defined in Article 4(8) and described further in Article 28 a “Processor” is a natural or legal person, public authority, agency or other body which processes personal data on behalf of the controller.  
Personal Data -- for purposes of the GDPR means any information relating to an identified or identifiable natural person.  Examples of such identifiable information includes: Name, ID Number, location data, an online ID/Handle, physical, physiological, genetic, mental, economic, cultural or social identity of that natural person.
Third Party – As defined in Article 4(10) a “Third Party” is a natural or legal person, public authority, agency or body other than the data subject, controller, processor and persons who, under the direct authority of the controller or processor, are authorized to process personal data.

What is the GDPR?
The GDPR is a regulation in EU law that governs the personal data and information of EU citizens and residents. 

Who does the GDPR apply to?
The GDPR applies to:
  1. Organizations (both for-profit and non-profit) that process personal data in any capacity with one of its branches established in the EU, regardless of where the data is processed, 
  2. Organizations established outside of the EU that offer goods and/or services within the EU regardless of price or lack thereof, or that monitor the behavior of EU citizens or those residing in the EU.
By contrast, the regulation does not apply to an organization that provides services to those outside of the EU that doesn’t specifically target citizens of the EU or those residing in the EU.  

EU Nations are:
Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.

There are four key changes that organizations subject to the GDPR need to be aware of:

1)    Increased Territorial Scope.  The GDPR greatly expands the scope of whom is responsible for data privacy protections. 

2)    Penalties.  Organizations in breach of the GDPR can be fined up to 4% of annual global turnover or €20 million, whichever is greater.  Although there is a tiered approach to the allocation of fines (Eg. 2% for an organization not maintaining proper records or notifying a supervising authority of a data breach or issuance of a warning or increased scrutiny for instances of minor non-compliance) the exposure to liability is momentous for organizations under the regulation’s jurisdiction.

3)    Consent. Lengthy disclaimers are not permissibleunder the GDPR. Qualifying disclaimers from organizations must:
i)              State the purpose for the data collection,
ii)             Be clear and distinguishable from other matters,
iii)           Be written in plain discernable language, and 
iv)            Provide a method of withdrawing this consent easily.

4)    Data Subject’s Rights
a.    Breach Notification.  Data breaches that may “result in a risk for the rights and freedoms of individuals” must be reported within 72 hoursof becoming aware of the breach.  Those affected by such breaches must be notified without “undue delay”.

b.    Right to Access.  This right enables Data Subjects to ask a Controller; i) if their data is being processed, ii) where their data is being processed, and iii) for what purpose is their data being processed.  Furthermore, Controllers are required to provide a copy of the personal data, free of charge, in an electronic format.

c.    Right to be Forgotten.  Also known as Data Erasure, this right entitles Data Subjects to require Controllers to erase their personal data, cease further dissemination of the data, and potentially to have Third Parties halt processing their data.  Typically, two conditions must apply for a Data Subject to demand Data Erasure: 1) the data maintained is no longer relevant to the reason it was originally processed, and 2) withdrawal of Consent by the Data Subject.  For a more detailed explanation, please see Article 17 of the GDPR.

d.    Data Portability.  Data Subjects are entitled to receive from Controllers personal data concerning them, which they have previously provided in a common use and machine-readable format and have the Data Subject maintains the right to transmit that data to another Controller.

e.    Privacy by Design.  The requirement that Controllers, in designing systems that could intake personal data, design such systems to be GDPR compliant as described by Article 25.  Furthermore, Article 23 requires that Controllers onlyhold the data absolutely necessary for the completion of its duties, as well as limit the access to personal data to those who require it in order to act out the processing.

f.     Data Protection Officers(“DPO”).  Because of the increased internal record keeping requirements, DPO appointment is mandatory only for those Controllers and Processors whose core activitiesconsist of processing operations which require regular and systematic monitoring of data subjects on a large scale or of special categories of data or data relating to criminal convictions and offences.  Additionally, DPOs;

                                               i.     Must be appointed on the basis of professional qualities, particularly expert knowledge on data protection law and practices,
                                             ii.     May be a staff member or external service provider,
                                            iii.     Contact details must be provided for the relevant Data Processing Authority as stated by Article 51 of the GDPR,
                                            iv.     Must be provided with appropriate resources to carry out their tasks and maintain their expert knowledge,
                                              v.     Must report directly to the highest level of management, and, 
                                            vi.     Must not carry out any other task that could result in a conflict of interest.

What does all this mean for South Carolina lawyers?
By now it should be clear that the landscape for cultivation of Personal Data and maintenance of that data will never be the same.  With the GDPR the EU is taking a clear stand in the discussion about how data is collected and used and providing heavy punitive repercussions for non-compliance.  

Organizations, both those for profit and non-profit, with any connection to any EU member State, either through its membership, or how it operates, should immediately seek counsel to ensure compliance with the GDPR and avoid catastrophic exposure to risk and liability.  The biggest threat is realized by non-obvious organizations that fall under the GDPR’s jurisdiction.  South Carolina-based  schools, law firms, banks, alumni organizations, fraternities & sororities, professional or industry organizations, real estate agents, and goods manufactures (just to name a few) all need to ensure that they are compliant with the GDPR requirements as soon as possible.
EU Data Protection Reform: ensuring its enforcement, European Commision Fact Sheet, January 2018. (Accessed April 26, 2018.)
Christopher Campbell is an associate at Willoughby & Hoefer, P.A. His practice areas include administrative law, business law, litigation, and international commercial arbitration.
[1]Full Text of GDPR: https://gdpr-info.eu

Comments

Post a Comment

Popular posts from this blog

Young Lawyer Spotlight of Andrew Walden

Image
Andrew Walden is an associate attorney in Womble Bond Dickinson’s Charleston office, where he works in the Business Litigation practice group and focuses primarily on construction litigation and other business disputes. Andrew previously worked in small firm with a general civil practice and more recently for a regional insurance defense firm defending workers’ compensation claims. Andrew has served on the board of directors for MUSC’s Storm Eye Institute and on the leadership team for the American Heart Association’s Heart Ball. Andrew and his wife Rachel have a two-year-old son and one-year-old daughter. By any measure, his plate was full.   But Andrew has found time to serve his country as well. Last summer, Andrew embarked on a journey to join the U.S. Army’s JAG Corps. This required application and acceptance into a crowded and competitive field, and then completion of six weeks of basic training where he obtained necessary military skills and conditioning at Fort Benn...
Read more

Young Lawyer Spotlight: Jeremy Summerlin

Image
When it comes to Star Wars knowledge and Game of Thrones’ trivia, upstate attorney Jeremy Summerlin is unparalleled.  Jeremy, a shareholder with the Horton Law Firm, practices civil law with a focus on employment discrimination and business litigation.   For those who know Jeremy, he has an uncanny ability to relate employment law to Star Wars, as reflected in his recent article for the South Carolina Young Lawyer’s Division Publication entitled “Does the Rebel Alliance’s Suspicious Procurement of the Death Star Plans Render it Liable Under South Carolina’s Trade Secrets Act?” [1]  or his blog post on whether Han Solo was an independent contractor or an employee of the Rebel Alliance on his blog, www.trueorflsa.com.  Jeremy graduated from Bob Jones University in 2009. Jeremy then interned in the Thirteenth Circuit Solicitor’s Office for a year before attending the University of South Carolina School of Law.  During law school, Je...
Read more

Young Lawyer Spotlight: Thomas Scott

Image
Thomas Scott has already achieved much in his short legal career! Having been practicing since 2011, Thomas hails from Columbia, South Carolina, and is a proud member of the South Carolina Bar. Thomas’ academic career began at the USC Honors College, where he graduated at the top of his class in 2006 before continuing his studies at both Princeton and Stanford. Returning back to his home state in 2012, Thomas served as a law clerk for U.S. District Judge Richard Gergel in Charleston. His time with Judge Gergel was not the only time that Thomas had the privilege of a clerkship—he also clerked on the 11 th Circuit Court of Appeals AND in South Africa! Following his clerkship, Thomas worked for Freshfields Bruckhaus Deringer, one of the largest international law firms in the world, and now serves as counsel for Cruise Automaton, a self-driving car company based in San Francisco. His most recent accomplishment? Being selected for an international leadership...
Read more