Australian companies face risk of cyber litigation

Australian companies are facing the threat of growing cyber breach-related litigation following the expected introduction of mandatory data breach reporting requirements this year, according to cybersecurity expert Adam Salter.

Salter, a partner in Jones Day’s Cybersecurity, Privacy & Data Protection practice, told attendees to a Sydney seminar that Australian companies face aggressive litigation at levels consistently seen in the US.

“Despite several failed attempts to pass mandatory breach notification legislation over recent years, there now appears to be bipartisan support for the current Bill before the parliament, meaning businesses should be taking action now to ensure they are ready to comply with the legislation once it takes effect,” he said.

Based on the experience in other markets that have introduced mandatory data breach notification, companies that are not prepared for the change are at greater risk of lawsuits from both corporate and consumer customers.

He urged Australian businesses to take key steps including regularly reviewing and strengthening IT and data security systems, policy and procedures and preparing for how they will report a potential data breach to authorities and customers.

“In particular, businesses should review (or if not already in place develop) risk management and compliance policies and procedures to both prevent data breaches and deal with them, in the unfortunate but increasingly likely event that they occur,” he said.

Salter was speaking at a seminar held by the global law firm Jones Day. The keynote speaker at the event, Australia’s first Special Adviser to the Prime Minister on Cybersecurity Alastair MacGibbon, echoed his concerns.

MacGibbon said it is too easy for individuals, businesses and government to be complacent in the face of cybersecurity risks.

“The Australian government recognises that we must lead by example when it comes to detecting, deterring and responding to cyberthreats and risks. But we cannot do this in isolation. It is absolutely critical we partner with and have the support of businesses to drive and implement the initiatives we outlined in our Cyber Security Strategy,” MacGibbon said.

“Strong cyber defences have much wider ranging implications than most people realise — it has huge benefits to our economy, improves social opportunities of connecting online and boosts our national prosperity.”

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