UK firms ignoring data protection deadline

UK companies will struggle to hit the 24 October deadline enforcing legislation on electronic data transfer and individual privacy, according to a leading UK lawyer.

An EC directive on data protection and privacy is to be enforced despite the fact that most UK and US companies have ignored the two-year compliance period.

Jonathan Armstrong, senior associate at Eversheds law firm, said the UK Data Protection Act 1998 was deferred so companies had time to comply, yet the majority in the US and UK have not done so.

The Act states: "Personal data shall not be transferred to a country or territory outside the European Economic Area unless that country or territory ensures an adequate level of protection for the rights and freedoms of data subjects in relation to the processing of personal data."

Armstrong doesn't believe the UK Information Commissioner (who will be policing the legislation's enforcement) has enough financial or human resources to "knock on every door in Britain".

However, Armstrong said: "I expect high-profile prosecutions. The information commissioner will look at business areas that cause concern and target them."

Andrew Parker, analyst at Forrester, said: "Any problems incurred by this legislation are likely to come via how strenuously the various regulatory bodies are able to enforce it."

"There will be a log jam effect in months as public grievances about misuse of personal data expose the letter of the law," he added.

UK companies are required to comply with the legislation by acquiring a licence for electronic data transfer from the UK information commissioner Elizabeth France.

For electronic data transfer with US organisations, US companies must volunteer to be watched by the strict Federal Trade Commission (FTC) in a 'safe harbour' agreement, although its tough reputation has led to only 75 US companies volunteering, according to Armstrong.

Research from law firm Tarlo Lyons with The Opus Group found although 53 per cent of 137 UK respondents transmitted data abroad electronically, 61 per cent were unaware of the impending deadline.