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The UK General Data Protection Regulation (UK GDPR) is a strict data protection law that sets out various rules regarding the use of personal data. You must consider its rules when working with third parties, such as consultants, who will have access to personal data your business shares with them. Determining whether your consultancy agreement should include data processing terms is crucial when you engage a consultant. This is a key consideration when the consultant can access any personal data. This article explores whether a business needs data processing terms in a consultancy agreement.
What is a Consultancy Agreement?
A consultancy agreement is a legal contract that sets out the terms and conditions under which a consultant provides services to a business. It covers key terms, including the scope of work, payment terms, confidentiality obligations, intellectual property rights ownership, and other critical aspects of the business and consultant relationship.
Including data processing terms in this agreement is a crucial consideration if the consultant will handle personal data on behalf of the business.
When Are Data Processing Terms Necessary?
The agreement clarifies both parties’ responsibilities and obligations under the UK GDPR by including data processing terms in a consultancy.
These terms outline how the consultant will handle personal data, including the scope, nature, and purpose of data processing activities. When a consultant processes personal data on behalf of your business, these terms provide a clear framework to ensure compliance with data protection laws.
You must assess whether the consultant will handle personal data during their engagement as a data processor. If the consultant processes personal data on behalf of your business, they will likely act as a data processor.
To determine if the consultant is a data processor, evaluate whether they process personal data on your behalf and follow your instructions. A data processor handles personal data according to the data controller’s directions without deciding the purpose or means of processing. For example, a consultant can access your staff’s details to work on your project on your strict instructions but for no other purposes. In that case, they will likely act as a data processor. This is because they will have access to your staff information for limited purposes but need to delete it after the engagement and have no control over it. Conversely, if the consultant decides the purposes and means of processing the personal data, they may be considered a data controller, which gives rise to different legal responsibilities.
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What are the Key Elements of Data Processing Terms?
To ensure compliance with the UK GDPR rules, data processing terms in a consultancy agreement should cover several key issues, including the following:
Scope, Nature, and Purpose and Instructions for Processing
Your agreement must clearly define data processing activities’ scope, nature, and purpose. You should carefully specify the types of personal data the consultant will process and the duration of processing. You should also detail the specific instructions the consultant must follow when processing personal data, ensuring they act according to your guidelines and not independently.
Confidentiality and Security of Personal Data
You should include confidentiality clauses to ensure the consultant keeps personal data secure and does not disclose it to unauthorised parties. Depending on the risk, you may specify the technical and organisational measures the consultant must implement to protect personal data. For instance, this could include measures such as encryption, access controls, and regular security audits.
Subprocessing Rules
You should consider whether the consultant can engage sub-processors and, if so, under what conditions and cover these in your agreement. You must ensure any subprocessors comply with UK GDPR requirements and have data protection obligations similar to those you impose on the consultant.
Data Subject Rights and Data Breach Support
You should ensure the consultant assists in fulfilling data subject rights, such as access requests, rectifications, and erasures.
This factsheet sets out how your business can become GDPR compliant.
You should also define the procedures for notifying your business in case of a data breach. The consultant should inform you promptly to take necessary action if they become aware of a data breach, and you can specify a specific timeframe for reporting. This can be business critical, as you must report certain breaches within strict timeframes.
Data Return or Deletion
Specifying what happens to personal data at the end of the consultancy agreement is vital. The consultant should return or delete the data according to your instructions.
Incorporating data processing terms in a consultancy agreement requires careful attention, and in addition to mandatory clauses, you should consider other optional clauses to protect your business from risk. For example, indemnity provisions can require the consultant to compensate your company for any losses you suffer due to their breach of data protection laws. This can be a vital tool to recover any data protection losses your business suffers due to the consultant’s breach.
These data processing terms could also form part of a separate Data Processing Agreement, a legal document binding the processor to comply with the UK GDPR requirements when handling personal data on behalf of the controller. A lawyer can advise you on the appropriate documentation for your consultancy relationship.
Key Takeaways
Including data processing terms in consultancy agreements is crucial for UK GDPR compliance. Clearly defining the scope and responsibilities of data processing activities will help businesses meet their data protection obligations and mitigate risks associated with handling personal data. Suppose you need advice on drafting or reviewing consultancy agreements with data processing terms. In that case, you should seek legal advice from a data protection lawyer to ensure compliance with the UK GDPR.
If you need advice on data protection law compliance, LegalVision’s experienced data privacy lawyers can assist as part of our LegalVision membership. With a low monthly fee, you gain unlimited access to lawyers who can answer questions and draft and review documents. Call us today on 0808 196 8584 or visit our membership page.
Frequently Asked Questions
1. Do Consultancy Agreements Need Data Processing Terms?
Under UK GDPR, if a consultant processes personal data on behalf of your controller business, including data processing terms in the consultancy agreement is mandatory. These terms should set out rules regarding how the consultant may process personal data as a processor on behalf of your business.
2. What Should Data Processing Terms Should a Consultancy Agreement Cover?
Data processing terms should include various terms such as the scope, nature, and purpose of data processing, specific instructions for the consultant, confidentiality clauses, security measures, subprocessing conditions, data subject rights, breach notification procedures, and data return or deletion instructions.
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