What Liabilities Could Data Processors Face For Breaching the UK GDPR?

Many suppliers and contractors act as data processors. They handle personal data on behalf of businesses, which are data controllers. If you are a data processor, understanding your legal responsibilities is vital. This is especially true under the UK General Data Protection Regulation (UK GDPR). Failing to comply with data protection laws can significantly harm your reputation. This article explores key liabilities you could face as a processor. It also outlines steps your business can take to reduce non-compliance risk.

What are Your GDPR Responsibilities as a Data Processor?

As a data processor, your role is to process personal data on behalf of a data controller and follow their specific instructions. Unlike data controllers, you do not determine the purposes or means of processing personal data. Instead, your task is to carry out the processing activities as directed by the controller. Despite this, under the UK GDPR rules, processors still have mandatory direct legal obligations.

A processor holds responsibility for strictly handling personal data according to the data controller’s documented instructions. However, processors also have independent duties under the UK GDPR, such as implementing appropriate technical and organisational measures to ensure data security.

Additionally, a processor must notify the data controller without undue delay in the event of any data breach. This allows the controller to determine which action to take and whether the breach is reportable to the ICO or impacted individuals.

Further, unless limited exceptions apply, processors must keep accurate records of all processing activities, including the type of data they process and the security measures in place. As such, processors have a range of essential duties which they must comply with under data protection law rules.

What GDPR Non-Compliance Risks Do You Face?

Non-compliance with the UK GDPR can expose your business to various liabilities as a data processor. Compliance is vital and should, therefore, always be a top priority.

There are several vital risks you could face for breaching your obligations, including the following:

Enforcement Action

The ICO can investigate processors for non-compliance with data protection laws. This includes various powers to request information about your processing activities and conduct audits. 

Depending on the severity of the suspected breach, the ICO can issue corrective actions. These can include warnings, orders to comply, or high administrative fines. 

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Criminal Penalties

Criminal penalties are possible and may arise if you unlawfully obtain or retain personal data, re-identify anonymised data without authorisation, or manipulate data to avoid lawful disclosures. These offences can lead to prosecution under the Data Protection Act 2018.

Private Lawsuits

Individuals can seek compensation for harm caused by non-compliance with the UK GDPR. This includes financial losses and emotional distress due to improper data handling or breaches. 

Contractual Liability

Contracts between controllers and processors must contain specific provisions to ensure UK GDPR compliance. If a processor fails to adhere to these contractual terms, they can be held liable for damages independent of regulatory penalties. 

How Can You Reduce Your GDPR Liability Risks As a Data Processor?

To reduce your liability risks, it is essential to take several key steps:

• Comply strictly with the data controller’s instructions: Always process data as directed by the data controller and ensure that you comply with their instructions on how you should handle their personal data; 
• Implement robust security measures: Ensure that personal data is protected by using appropriate technical and organisational security measures, such as encryption, access controls, and regular security audits;
• Maintain accurate compliance records: Keep detailed and up-to-date records of all processing activities, security measures, and any sub-processors you engage. Regularly review these records to ensure they are fully correct and current. Whilst these records are not always mandatory, they are best practice and can help evidence your compliance efforts;
• Respond promptly to data breaches: If a data breach occurs, you must notify the controller without undue delay so they can take appropriate action. As such, you should make sure you put in place a robust process in place to identify and report potential breaches; and
• Review and update contracts: You should carefully ensure that your contracts with data controllers clearly state your responsibilities, including UK GDPR-compliant clauses. As a processor, you should carefully consider the limitation of liability clauses in your data processing agreements with controllers. While these may be heavily negotiated, they are key clauses to help protect your business from risk.

Key Takeaways

As a data processor, you could face significant liabilities under the UK GDPR. These can include administrative fines, criminal penalties, and private lawsuits. You are subject to the ICO’s enforcement powers and can be liable for non-compliance. As such, you must focus on compliance on an ongoing basis and pay attention to your obligations. By implementing robust security measures, following the instructions of data controllers, and maintaining detailed records of your processing activities, you can help minimise these risks and ensure you remain compliant with UK GDPR. 

If you need advice on compliance with the UK GDPR as a processor, our experienced data, privacy, and IT lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

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