Legal Talk 14: What is Data Law?
 
We meet. You say that things are going well. Investors are showing a lot of interest, but you still haven't hired a lawyer yet. You've just been relying on me up until now.

Anyway, the key thing you want to talk about is data law.

Nowadays, tonnes of people are doing seminars about data, but you just haven't got the time to turn up or read reems of legal stuff on it. There’s not really that much to it really. If you know the basics then you can go a long way without a lawyer’s help. Also, you can build upon your knowledge once you have a general framework. 
 
1. Data, particularly big data (i.e. a lot of it) is obviously really important. For example, the more useful data you have (e.g. email addresses, names) the more you can engage with your customer base, which means ultimately the more things you might be able to sell to your followers/customers. This in turn will lead you to making more money, acquiring larger investment and growing your company faster.

2. Most lawyers talking about data law will tell you about the Data Protection Act and European Regulations. Let's call these the Data Regs for short. The majority of stuff they will talk about will be completely irrelevant to what you are doing and probably will never happen to you, but are nice legal technicalities which they like to swim in, but which you haven't got time for. 

So, key points note: 

(a) personal data is data that relates to individuals. If personal data is truly anonymised (e.g. for statistical purposes re: web visits etc.) then the Data Regs won't apply. 

(b) the Data Regs generally just want to make sure that data that you obtain is obtained fairly and with the user's consent, kept safe and used for proper purposes, which your users are content with. So, you shouldn't be spamming them or using their data for nefarious activities.  
Also, there are a few requirements that come up all the time which are:

(i) if you are processing personal data then you need to register (or notify as it is called), the Information Commission (which is the data regulator). Details about this can be found at: www.ico.org.uk and it is all pretty straight forward. 

(ii) you can't transfer data to a country outside Europe unless it has equivalent data protection laws to Europe. So, for example, transfers to the US have to be looked at carefully and there are various ways of transferring data to the US, such as via special contracts (model contracts) or safe harbour schemes (which is the subject of much debate).

(iii) you are always on the hook for any breaches of the Data Regs even if the damage was actually done by one of your sub-contractors. So, this means you need tough written contracts with your sub-contractors (if you have any) regarding their use and handling of your data so if you get in trouble with the Regulator then at least you might have some recourse against your sub-contractor, if it was your sub-contractor's fault.

(iv) to keep your data secure password protect it and encrypt your data if you can. Encryption isn't as scary as it sounds, check this link for further information: https://digitalguardian.com/blog/what-data-encryption. Also, just make sure your employees don't leave laptops on the bus or train or something like that (and just encrypt data anyway so even if this does happen no one can get to the data). You might be surprised at the number of times this happens.

Let's call these requirements in (b) Proper Usage. 

(c) In the UK the penalties for breaching the Data Regs can go up to £500,000 (worst case) but there are new Data Regs which can make the penalties higher. Anyway, if you are involved in Proper Usage then penalties don't really come into play. 

Anyway, in the event that you do have a data breach (e.g. you lose data or are hacked) then you need to think about whether it is serious enough to notify the regulator about it.

So, that's it. End of.

“But”, you say. “Surely there is more to it than that. These lawyers are charging thousands to speak at seminars, what else is there?”
 
Okay, so underlying each Proper Usage is detail about how to gather data (basically have a privacy policy), how to store data (have technology that keeps data safe), how to transfer data (have some written contracts in place) and have a staff policy (so staff know how to keep data secure etc.).

But, dare I say it, some lawyers need to scare the living daylights out of you so that you get them to do some detailed analysis of your systems and at significant cost. Yes, sometimes this analysis is necessary, but you can really limit the amount of time you need to use these lawyers if you know the basics.

We finish our coffees. You look relieved.

Looking forward to hearing how your tech start-up is growing.

Yours truly
 
Jimmy Desai
Your Legal Coach

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​© 2019. Coaching Law Limited. All rights reserved.

Legal Talk 12: Mediation Not Litigation

It's late at night in the office and you text me saying, "Hey Legal Coach, what's up? I was just wondering if you had some key words on the legals for a tech start up, what would they be?" 

Okay, where do I start? Well, now that we have talked a bit about branding you might wonder how you enforce your brands. One way is legal action against infringers. But here is my advice: try not to get into litigation!

You respond immediately: "But what can I do if people are infringing my rights?" Okay:

1. Litigation is expensive. Very expensive.
 
Before even thinking about litigation, think about whether or not you can afford to get lawyers involved. Remember, that in the UK the general rule is that the loser in litigation usually pays the winner's legal costs (and to be accurate the loser typically pays c. 75% of the winner's legal costs). If you think about that for a minute you realise that the loser could end up with 3 bills:
a. the loser's lawyer's costs;
b. the winner's lawyer's costs; and
c. any compensation that the loser has to pay the winner.

2. Why is litigation so expensive? 

Litigation takes a long time and there is no telling when it might end. Some cases can go on for months or even years, and lawyers charge by the hour.

In addition, new facts emerge during the course of litigation and these are then explored. Basically, there are a likely going to be several twists and turns. Again, charting all of these facts in chronological order and exploring all of these facts takes time, which equals more cost.

"But what can I do to avoid getting bankrupted by legal costs?" You say.

Okay, good question. Here are a few tips that have worked for me in the past: 

a) Do involve a lawyer from the very start if you sniff a dispute might be in the offing.

But, DO NOT get the lawyer to write to the other party at the very start. The point here is that if you get your lawyer to write to the other side in legal language and in a threatening tone, guess what? There is a good chance that other side hires their lawyer to write back to your lawyer in a more threatening tone. This could be the start of litigation.

What you might also find is that the more letters between lawyers, the more each party's view of the situation gets entrenched, and the less likely the issue complained of is likely to get resolved. Instead, the argument simply widens as to who said what and when and to some irrelevant points and the whole thing gets a little bit out of control.

"But what do I do instead?" You say. Well at the start, ask your lawyer where you stand legally and see what your rights might be.

Then, YOU could personally email or write to the other side in your own words (in a professional but non-threatening tone explaining the issue). Get your email checked by your lawyer just to be sure it is legally okay but put the email in your own words. Ask for a call with the other side to see if you can sort it out on the phone or with a meeting. See what they say. It might be a misunderstanding or they might propose some solution. You might be pleasantly surprised.

The point is that the discussion has started off on the right foot and this might help resolve the issue quicker and cheaper than exchanging lawyer's letters. 

b) But what if the other side just ignore me or tell me to go and take a run and jump?

Most people you email will respond in a civil manner, even if they disagree with you. Even if they do disagree with you, you can say that if you cannot sort it out between you, then you might have to get lawyers involved but that you don't want to take this course of action. They probably won't want to do that either, and this often helps to nudge the other side into discussions with you. All the while, you could have your lawyer checking things in the background but not appearing on the scene. 

Okay, I appreciate that in some cases, if the other side don't co-operate at all then a lawyer's letter might be necessary. But even then, it's really important that you vet the lawyer's letter, to ensure that it has the right tone.

If your lawyer goes in too hard at the start, then this might work if the other side are scared, in which case they may do what you want straight away. But this is a gamble. If they are not scared by the initial scary letter and hire their own lawyer, then the chance for any kind of constructive dialogue might have been ruined. 

c) Think mediation.
 
If the other side respond to you to say that they don't agree and have hired lawyers, suggest mediation early on. Mediation is basically where the parties can sit around a table and talk confidentially about their view on the dispute. A mediator is like a facilitator that tries to get the parties to talk to see if there is any way of bridging the gap between them, but the mediator is not a judge. The benefits to this are that it is relatively informal, much cheaper than litigation and it can help to iron out any misunderstandings. 

Wow, you say. You’re glad that you asked because you thought that you would just hand any infringement issues over to a lawyer and let the lawyer get on with just sorting it out.

You really must manage and oversee the process. Your lawyer will be helpful but you need to be involved in the strategy and execution, otherwise things could escalate in a way that you're not happy with. 

"Okay", you say. You summarise your understanding: "So, what you are saying, Legal Coach, is that if there is a chance of a dispute then get my lawyer involved at the start, but I need to understand that litigation is very expensive. So, I need to manage the process really carefully and not just rely entirely on my lawyer to do this for me. Is this right?" Yes, spot on. If you want to do a bit more further research however, I recommend this link: https://www.wipo.int/amc/en/mediation/what-mediation.html.

Yours truly 

Jimmy Desai
Your Legal Coach

​P.S. Don't forget to subscribe and get even more exclusive content and legal insight. As always, this legal talk and all the legal talks are subject to our disclaimer, which you can find here.

​© 2019. Coaching Law Limited. All rights reserved.