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Cyber, Privacy and Technology Best Practices and Reputational Harm: Why Legal Professionals Need a Lawyer’s Advice, Counsel and Privileges

BabyB_LPlate_improvedIntroduction

Lawyers, like other professionals, often have access to their clients’ personal and financial details. At the same time, they may possess comparable information about their clients’ clients (such as when a lawyer represents a healthcare company). As a result, lawyers are at risk for being sued if and when something happens to that information – such as when a laptop or cell phone is misplaced or stolen or a hacker breaches a law firm or client’s systems and accesses the client’s personally identifiable, health care, and/or confidential information.
The most prudent way to avoid such lawsuits and minimize their impact is to create and implement cyber, privacy and technology (“CPT”) best practices before something goes wrong. In most cases, this would include best practices training and education as well as the purchase of dedicated CPT-specific insurance. This article discusses why lawyers are at risk, how to create and implement best practices, and the advantages of CBT insurance coverage rather than (mistakenly) relying on professional errors and omissions and/or general liability coverage in the event of a CPT incident.

Executive Summary

An attorney’s reputation is his and her lifeblood. Indeed, reputation translates to the bottom line. For better or worse.
And, of course, reputation is, in large part, predicated on the quality, timeliness and cost-effectiveness of the services being provided. So too, it is incumbent that an attorney avoid negative commentary (or embarrassing revelations) through the pervasive and ubiquitous medium of social media. As a corollary, attorneys, like others, must be sensitive to the loss of customer goodwill, whether measured by turnover, client retention or other intangible assets.

Regardless of whether your clients are the Fortune 500, middle-market companies or small entrepreneurs, an attorneys’ clients – and by extension, the attorney himself and herself (to the extent the attorney holds personal, health or commercial information) – are at risk of losing personally identifiable information (“PII”), personal health information (“PHI”) and/or confidential commercial information (“CCI”). It doesn’t matter whether the harm is attributable to malicious activity or simple employee or third-party negligence. It’s the effect that is the focus, not necessarily the cause (although that too factors into the analysis).

In many cases, the effect of a cyber incident could be devastating, if not fatal, to an attorney’s reputation. And, by extension, his or her practice’s economic viability.
It is almost axiomatic to say that “best practices” are among the most important strategies employed by attorneys and other professionals. Just as we counsel clients to use best practices with respect to their operations, so too, we, as professionals, should be well-trained on the scope and extent of best practices in the subject matter presented, including, in particular, CPT risks and exposures, which, to no surprise, are palpable and potentially devastating.

In the CPT context, among others, best practices counseling should be provided by an attorney. Unlike non-lawyers, attorneys bring with them the attorney-client privilege and work product protection. Although vendors and IT specialists can promote themselves as having the appropriate knowledge and training to teach and implement best practices, they do possess the critical protections afforded by the attorney-client relationship. In a relatively new space like CPT, where the law is uncertain and developing, the privileges become even more important, as many attorneys are just at the start of the learning curve.

To continue reading, please contact me at rbortnick@cpmy.com. A complete copy will be emailed upon request. Cheers. Rick

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Canada Update: The Tort of “Intrusion upon Seclusion”

The following was written by my friend Patrick Cruikshank, Underwriting Manager, Specialty Risk – Professional Liability at Northbridge Insurance in Toronto. Thanks to Patrick for his contribution. Relevant articles are always welcome for publication.

Rick

canada-flag-stereotypesIn the 2012 case of Jones v. Tsige, the Ontario Court of Appeal established the new tort of invasion of privacy.  For some, this privacy tort has opened a Pandora’s Box.  For others, it’s considered legal progress in the modern technological world.

Sandra Jones and Winnie Tsige were employees of the Bank of Montreal (BMO).  They worked at different branches and did not know each other.  Tsige was in an intimate relationship with Jones’ ex-husband.

Over a period of 4 years, Tsige used her workplace computer to gain access to Jones’ personally identifiable information and personal financial information 174 times.  Tsige did not disseminate this information.

When Jones discovered this unauthorized access, she made a formal complaint to her employer, who upon investigation determined that Tsige had accessed Jones’ information and had no legitimate reason to do so.  Jones subsequently sued Tsige for invasion of privacy and breach of fiduciary duty.  She sought $70,000 in general damages plus $20,000 in punitive damages.

Jones’ claim was dismissed by the Ontario Superior Court because there was no law in Ontario that recognized an invasion of privacy tort.

The Court of Appeal overturned the decision and granted summary judgment in favor of Jones.

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