Original URL: http://www.theregister.co.uk/2013/09/03/does_quashing_the_scottish_borders_monetary_penalty_mean_a_change_to_ico_enforcement_policy/

£250k fine for dumping council workers' files in Tesco bins, er, binned

But does this mean a change to ICO enforcement policy? Legal bod investigates

By Amberhawk Training

Posted in Law, 3rd September 2013 06:58 GMT

Comment I have just read the information tribunal decision and the reasons why the panel quashed the UK Information Commissioner’s £250,000 fine against the Scottish Borders council.

The local authority was punished after a worker dumped employees' private data in bins at a nearby Tesco and another unnamed supermarket.

It seems clear from the judgment that the tribunal thinks that the Information Commissioner's Office (ICO) should have served an enforcement notice - an order to change practices and end data leaks.

The tribunal has hinted that ICO should, even at this late stage, serve an enforcement notice and that Scottish Borders should accept it. The fact that the tribunal’s decision is designated to be “Preliminary Decision” means that the panel is reserving its position; it could impose its own solution and clearly does not want Scottish Borders to be seen as being wholly innocent.

Unlike other commentators, I don’t think that the tribunal’s reasoning in its decision will result in much change to the ICO’s policy with respect of the use of enforcement or fines (monetary penalty notices) – except possibly he will take more care in deciding the appropriate enforcement mechanism.

In my view, the tribunal has simply determined that, on the facts of the case presented before it, the ICO had chosen the wrong enforcement vehicle.

However, I do think that the Scottish Borders case provides another example of the failure of the ICO to pursue “lawful processing”; if the ICO had focused “unlawful processing” as the reason underpinning the contravention of the Data Protection Act (DPA), then I think the outcome could have been different. I'll explain why below.

Finally, I think the idea of an MPN levied against any public sector data controllers lacks logic; there should be instead an offence associated with deliberately ignoring or grossly neglecting an obligation to comply with a data protection principle.

The Scottish Borders Tribunal (preliminary) decision

To understand the tribunal’s decision, it’s useful to look at the relevant section of the MPN provision as it applies in the Scottish Borders case. Section 55A(1) allows the Commissioner to serve a MPN if he is satisfied that three conditions apply. These are that:

(1) There has been a serious contravention of a data protection principle (in this case the Seventh Principle*) and

(2) “The contravention was of a kind likely to cause substantial damage or substantial distress” and

(3) The data controller (in this case Scottish Borders):

“(a) knew or ought to have known —
(i)that there was a risk that the contravention would occur, and (ii)that such a contravention would be of a kind likely to cause substantial damage or substantial distress, but

(b) failed to take reasonable steps to prevent the contravention”.

Now to the facts of behind the MPN. In summary, Scottish Borders had used a contractor (data processor) for back records conversion for over two decades. There was no data processor contract in place because the value of the contract was under £20,000; there were no provisions for managers who agreed such smaller contracts to ensure that any of the other data processor requirements outlined in the Seventh Principle were met.

For instance, there were no written instructions given to the data processor as to how to dispose of the manual records (once converted); the data processor apparently took it upon himself to dispose of the original records by means of the use of the recycling bins found at several locations in supermarket car-parks.

This disposal technique could have been used a number of times since 2008; it is not surprising that the tribunal determined that, since the 1998 Act commenced, there was sufficient evidence to identify a “serious” contravention of the Seventh Principle.

That is why the tribunal states that "procedures in relation to contracts for data processing were too serious simply to allow the Council's appeal (against the MPN)”. In other words, the tribunal does not want Scottish Borders to escape “Scot-free” so to speak; that is why it suggests an Enforcement Notice and has reserved its position (see paragraph 55).

How do a trigger event and a contravention differ?

Before going further, it is important to explain that the tribunal had to differentiate between the “trigger event” and the “contravention”. For the tribunal, the “trigger event” occurred several times (ie, each time a supermarket recycling bin was used) however the “contravention” of the Act was the lack of data processor supervision.

The tribunal, however, had difficulty in establishing the consequences of the lack of data processor supervision (ie, finding evidence that “such a contravention would be of a kind likely to cause substantial damage or substantial distress”).

Indeed the tribunal stated that “Focusing on the contravention we have been unable to construct a likely chain of events which would lead to substantial damage or substantial distress”.

Of course it was possible to imagine some untoward consequences of data processor supervision (eg, the Press publishing certain details); however what was “possible” did not pass the threshold of “likely”. In further detail, the reasons for the tribunal’s difficulty are:

In summary, any actual data loss was limited to a few data subjects and did not involve sensitive personal data. No evidence of substantial distress could be adduced as being ”likely” from the time after when the MPN was introduced. However, the contravention involving the unsupervised data processor had occurred for years. Hence, as the MPN thresholds were not reached, the Enforcement Notice became the only game in town.

Unlawful processing?

I think Scottish Borders was successful in its MPN appeal because of two reasons:

With respect to the latter, the limitation to data processor supervision is a consequence of the ICO’s neglect of the link between the common law of confidence and lawful processing; something which in the context of the processing of confidential personal data has yet to be remedied.

For instance, I am sure that you would agree that pension details relating to the financial affairs of data subjects are subject to an obligation of confidence, and the disposal of these confidential details in the “Scottish Borders way” sits uneasily with such an obligation.

So instead of the current case based on just the data processor obligations of the Seventh Principle, the ICO could have focused “unlawful” processing as part of the MPN.

He could have thus argued the MPN in terms of a substantial breach of the First and Seventh Principles; the First Principle in terms that confidential personal data have to be processed “lawfully” with due regard to the common law of confidence, whereas the Seventh Principle requires “appropriate organisational and technical measures” to guard against “unlawful processing” (ie, a breach of the obligation of confidence”).

Note that with this change of emphasis, the case widens the grounds. The actual case was linked to the supervision of a data processor whereas a “lawfulness” case would be linked to all appropriate organisational and technical measures linked to processing of the confidential personal data.

In other words, when the ICO is considering whether a MPN should be served, on the grounds of “lawfulness” his investigation would be far wider; it would allow Scottish Borders approach to data protection and the processing of confidential personal data to be assessed across a range of issues (ie, all relevant organisational and technical measures to assess their appropriateness).

So in the actual case before the tribunal, the narrow confines of data processor supervision (or lack of it) was the only factor under consideration. By contrast, in a “lawfulness” approach, the lack of data processor supervision would be one consideration in many.

This story originally appeared at HAWKTALK, the blog of Amberhawk Training Ltd.

* The Seventh Principle requires “appropriate organisational and technical measures” to guard against “unlawful processing”.

References

Scottish Borders MPN Tribunal Reference EA/2012/0212 (PDF)

The ICO can deal with breaches of confidence as unlawful processing.

Scottish Borders council press release.