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Canadian Privacy Commissioner Releases Official Guidance as Data Breach Law Takes Effect

Canada’s new data breach law, The Personal Information Protection and Electronic Documents Act (“PIPEDA”), took effect on November 1. Official guidance released by the country’s Privacy Commissioner explains a few of the law’s key provisions that will affect organizations, specifically, breach reporting and notification obligations, their triggers, and record retention.

Reporting & Notification Obligations

Under the new law, an organization must report and notify individuals of a data breach involving personal information under its control if it reasonably determines the breach creates a “real risk of significant harm” to an individual, regardless of the number of individuals affected. (The guidance states a covered breach that affects only one individual would nonetheless require reporting and notification.) Importantly, the organization that controls the data is required to report and notify individuals of the breach—the guidance clarifies that even when an organization has transferred data to a third-party processor, the organization remains ultimately responsible for reporting and notification. The guidance encourages organizations to mitigate their risk in the event their third-party processor faces a breach by entering sufficient contractual arrangements.

Notification to individuals must be given “as soon as feasible” after the organization has determined a covered breach has occurred. The guidance states the notification must be conspicuous, understandable, and given directly to the individual in most circumstances. It must include enough information to communicate the significance of the breach and allow the those affected to take any steps possible to reduce their risk of harm. The regulations further specify the information a notification must include. In certain circumstances, organizations are also required to notify governmental institutions or organizations of a covered breach; for example, an organization may be required to notify law enforcement if it believes it may be able to reduce the risk of harm.

“Real Risk of Significant Harm”

The ultimate question for organizations to answer, to determine whether their reporting and notification obligations are triggered, is whether the breach creates a “real risk of significant harm.” The guidance defines “significant harm” as bodily harm, humiliation, reputation or relationship damage, loss of employment, business, or professional opportunities, financial loss, identity theft, negative effects on a credit record, and damage to or loss of property. Whether a breach of personal information creates a “real risk” of significant harm is determined by the sensitivity of the information and the probability it has been, is, or will be misused. The guidance further explains an organization should determine the “sensitivity” of information by looking to what personal information has been breached and the circumstances of the breach, but some information may be “clearly sensitive.” The guidance also lays out a number of questions an organization should consider to determine the probability of misuse, including whether a number of pieces of personal information were breached, how long the information was exposed, and whether there is evidence of malicious intent.

Record-keeping

Finally, the guidance explains the law requires an organization to keep and maintain records of every breach of personal information for two years, regardless whether the breach created a real risk of significant harm. These records must contain sufficient information to enable the Office of the Privacy Commissioner to verify the organization’s compliance with the law. At a minimum, this includes the date or estimated date of the breach, a general description of its circumstances, the nature of the information involved, whether the breach was reported and individuals were notified, and how the organization determined there was not a real risk of significant harm for breaches it did not report.

© 2018 Covington & Burling LLP

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About this Author

Sari Sharoni, Covington, regulatory lawyer
Associate

Sari Sharoni’s practice combines privacy litigation and advisory work on state and federal privacy and data security laws, federal copyright and trademark law, and analogous state laws.

Ms. Sharoni has advised clients on a wide range of matters, including retransmission consent, satellites, internal privacy-protection governance, privacy policy best practices, copyright public performance licenses, and registration of state publicity rights.

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