Data Security Breaches: Legal Implications

As has been widely reported, HM Revenue &

Customs (HMRC) admitted having lost two CDs containing the

personal and banking data of all child benefit claimants. This

affected about 25 million people, putting them at risk of

identify theft and fraud.

The Government intends to create numerous databases that

will centralise information about our identity, education,

social welfare and health. Although personalising our data may

facilitate the provision of better services, there are

significant privacy implications arising out of the

consolidation of these databases: for example, health

information about children is to be used to predict criminal


The HMRC incident prompted the House of Commons Justice

Committee to produce a report on the Protection of Private

Data. The report made three recommendations: (i) data security

breaches must be reported; (ii) there should be criminal

sanctions against "data controllers" responsible for

security breaches; and (iii) the Information Commissioner

should have better funding and new powers of inspection and


The report emphasised the urgent need to recognise the risks

arising out of the sharing of personal data between government

departments. Now that an unprecedented amount of information is

being collected and...

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