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If your business processes or shares personal data, you will likely have heard about the UK General Data Protection (UK GDPR) law rules. An essential rule under this law is for controllers and processors sharing personal data to enter into a data processing agreement. A data processing agreement is a contract which sets out key terms to safeguard personal data, as prescribed under the UK GDPR. Legal advice from an expert lawyer can add significant value when navigating and drafting data processing agreements. This article explores whether you need to take legal advice on your data processing agreement.
Why Are Data Processing Agreements Needed?
The essential purpose of data processing agreements is to safeguard personal data. A data processing agreement sets out various data protection obligations for parties.
For example, obligations to keep personal data confidential and implement appropriate technical and security measures to safeguard personal data.
See here for information on the key terms in a data processing agreement.
A data processing agreement is a contract between a data controller and a data processor. To take each concept in turn:
- a data controller decides how and why to use personal data. A controller provides instructions to a processor regarding how to process personal data; and
- a data processor, however, has no control over personal data. A processor follows the data controller’s instructions regarding using personal data.
You should note that data processing agreements are mandatory. Failing to have a data processing agreement when needed could lead to various adverse penalties for your business. There are several penalties for breaching the UK GDPR rules – for example, heavy fines and severe reputational damage. As such, it is vital to take the obligation to put data processing agreements in place seriously and understand when these obligations apply to your business.
Data processing agreements can be standalone agreements or form part of a contract – for instance, you can incorporate a data processing schedule of terms into your main customer agreement.
Do You Need Legal Advice on A Data Processing Agreement?
Getting legal advice on a data processing agreement is not obligatory but can add value in various ways.
Here are some critical considerations about taking legal advice on data processing agreements.
Do You Know If You Need a Data Processing Agreement?
From the outset, it is vital to understand if you need to enter into a data processing agreement. However, this can be something which businesses need help with. For instance, determining your role and whether your company acts as a data controller or data processor is essential. You should then consider if you are in a controller-to-processor relationship, which will determine whether you need to enter into a data processing agreement.
This analysis requires a well-informed understanding of the legal definitions of ‘controller’ and ‘processor’. It also involves an assessment of the circumstances in which you share or receive personal data from third parties. As a service supplier, you would need to analyse every customer relationship and contract you enter into and consider whether a data processing agreement is required.
By taking legal advice, you will better understand your role as either a data controller or a data processor. A data protection lawyer will also help you analyse how you share personal data and whether you need a data processing agreement. Legal advice such as this can be valuable, as it can help you comply with your mandatory legal obligations.
A lawyer can also help you decide which data processing agreement format is appropriate for your business and contracts. For instance, if you need a standalone data processing agreement or if you can incorporate data processing terms into your customer contracts.
Do You Understand the Terms of a Data Processing Agreement?
If you enter into a data processing agreement, knowing what this means in practice and understanding your obligations is vital.
If you breach your obligations, you could breach data protection laws. Further, the other party could have various contractual remedies against you, such as the right to bring a breach of contract claim against you in court.
This factsheet sets out how your business can become GDPR compliant.
If you are a data processor, Article 28 of the UK GDPR prescribes various mandatory terms which you must include in a data processing agreement. It is vital that you understand those terms and can comply with them. Your controller customers will entrust you with their personal data, and you must ensure you follow the terms of your processing agreement to avoid reputational damage.
By taking legal advice, a lawyer will guide you on what your data processing agreement means in simple terms and what you need to do under it. By taking legal advice, you will be comfortable that you fully understand your obligations and be in a better position to comply with them. This can be invaluable in the long run as it can help prevent disputes and breaches of mandatory legal obligations.
Do You Need Support with Negotiations?
The UK GDPR prescribes key mandatory terms which you must include in a data processing agreement. However, the mandatory terms are just some of the ones you should consider.
The parties can negotiate additional terms in their data processing agreements, such as liability and indemnities (compensation obligations).
The amount of negotiation required for a data processing agreement is not a one-size-fits-all approach. This will depend on several factors, such as how risky the data sharing is and how much data is shared. If entering into a data processing agreement will put your business at risk, there are various terms you could seek to mitigate against those risks.
These are vital considerations when seeking legal advice on data processing agreements. While legal advice is not mandatory, it can add tremendous value and protect your business from risk in several ways.
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Key Takeaways
Data processing agreements are mandatory legal requirements when a processor processes personal data on behalf of a controller. Understanding whether you need to enter into a data processing agreement is vital. If you do need to enter one, it is essential to understand your legal obligations to ensure you comply with them.
Taking legal advice, whilst not mandatory, can add significant value and benefit your business. For instance, a data protection lawyer can guide you on the legal requirements for your business and help draft and negotiate data processing agreements to protect your business from risk.
If you need legal advice about a data processing agreement, you can contact LegalVision’s experienced IT lawyers as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers who can answer your questions and draft and review your documents. Call us today at 0808 196 8584 or visit our membership page.
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