SCL Responds on Custodial Sentences for Data Misuse

January 8, 2010

Mark Watts, Chair of SCL’s Privacy & Data Protection Group, has submitted the SCL response to the Ministry of Justice’s consultation on penalties for data protection offences. Mark, a partner at Bristows, orchestrated meetings and consulted within the SCL membership before submitting a response. He is grateful to those SCL members who contributed to the response. 

The main focus of the consultation was on whether the Secretary of State should introduce custodial penalties for offences under s. 55 of the Data Protections Act 1998, using the powers granted by the Criminal Justice and Immigration Act 2008. The SCL response is very much in the affirmative:  

The potential loss to individuals whose personal data is “blagged” in a situation likely to be covered by “Section 55” is both significant and often difficult to quantify. Whilst an individual may have compensatory remedies under the DPA, these are often inaccessible to individuals or inappropriate in many blagging situations. In addition, there can be many situations where the effects of an individual’s personal data becoming “public ” or being used in an unauthorised way by a third party cannot be remedied by compensation alone. In order to avoid such situations as far as possible, it is appropriate to have a strong, high-profile deterrent of the kind that a custodial sentence would provide.  It becoming widely-known that the perpetrators of Section 55 offences may go to jail is far more likely to have a deterrent effect than the existing financial penalties. Moreover, given that it is proposed that monetary penalties up to a maximum of (potentially) £500,000 be available for breaches that, whilst “serious”, potentially fall short of the seriousnes of a Section 55 offence, it would be illogical for the sanctions available for the most serious, damaging, often deliberate and/or fraudulent offences to be significantly less (notwithstanding the theoretical possibility of an unlimited fine for a prosecution on indictment).

Also, personal data is an important “currency” in modern economies and something that is at the heart of many business models. In the online world, service providers are able to offer complex, feature-rich services free of charge because their business is “funded” by the aggregate value (usually to advertisers) of the personal data that they collect from users. There can be no doubt that personal data has value and is treated as an asset by businesses every bit as much as other assets, both tangible and intangible. This being the case, it is entirely appropriate that “theft” of such an asset should carry with it the possibility of sanctions, including custodial sentences, that are just as significant as for theft or fraud of other assets.

Finally, we would add that whilst the availability of custodial sentences is like as a deterrent, this will only be the case to the extent that they are actually issued in appropriate situations. 

There is a thoughtful response too to one of the allied questions. The Ministry asked whether it should implement the new defence to a charge under s. 55 (added by the Criminal Justice and Immigration Act  2008, s. 78), which applies where the act was for the purposes of journalism or other special purposes and was done in the reasonable belief that the act was done in the public interest. The SCL response is as follows: 

It should be borne in mind that as the Internet becomes more interactive with the boom in user-generated content, we are all in some senses “publishers” in the online world. Accordingly, the requirement that the material be for “publication” is not only a relatively low hurdle to overcome but also one that is likely to be available beyond traditional journalism. We urge that this term be defined so as to ensure that the effect of the defence is only to avoid any chilling effect on substantive, investigative journalism that is genuinely in the public interest (online and/or offline, obviously), rather than a defence which has an unintended broader application to other “publication” in a wider sense. 

The SCL Trustees want to express their gratitude to Mark Watts for his invaluable work on the response.