WHO IS ACCOUNTABLE WHEN THE COMPANY SUFFERS A CYBERATTACK?

1.    The pressure on the CISO

One of the main traditional obstacles when managing a cyber-attack had to do with the pressure under the CISO for not having been able to foresee it or not knowing how to handle it in time. In fact, the CISO was sometimes dismissed after a cyber-attack of a certain magnitude, in the belief that by dismissing this professional the company was justifying the incident as a purely human error caused by one of its employees, which could mitigate the reputational impact of the incident.

In fact, what was achieved was nothing more than adding more pressure on an expert who is already under great stress to resolve security incidents that are becoming more numerous and technically more complex.

2.    The CISO role under the current legislation

In this sense, the current cybersecurity legislation seems to protect the CISO and exempt him (to a certain extent) from sole responsibility for the occurrence of the incident. As a matter of fact, the new regulation consolidates the principle of shared responsibility, in the sense that, although the CISO may be liable for his actions during incident management (in the same way as the DPO is with respect to the performance of his tasks), the ultimate responsibility for making decisions related to the implementation of appropriate, sufficient and proportionate technical and organisational measures, as well as for supervising their effectiveness, lies with the entity's governing body, especially in the case of essential, important and critical entities.

Actually, the NIS2 Directive, currently being transposed into member states laws, already mentions this in Article 32.6, when it states that "Member States shall ensure that any natural person responsible for or acting as a representative of a critical institution with powers to represent it, the authority to take decisions on its behalf or the authority to exercise control over it has powers to ensure that it complies with this Directive. Member States shall ensure that such natural persons can be held liable for failure to comply with their duty to ensure compliance with this Directive".

In consequence, the entities considered of relevance under this rule cannot discharge their liability for any cyber-attacks suffered, as cybersecurity is a business risk and, hence, a responsibility of their administrators, as it requires decision-making that only corresponds to the governing body within its obligation of diligent management of the business.

This has also been established by the Spanish Supreme Court, in its judgment of 15 February 2022, when it ruled that:

[Although] the disputed question raised serious doubts as to the nature of the security obligations in the field of data protection, in fact the party's argument that we are dealing with an obligation of means and not an obligation of result is accepted.

This implies that in obligations of means the commitment acquired is to adopt the technical and organisational measures, as well as to deploy a diligent activity in their implementation.

The difference lies in the liability in each case, because while in the obligation of result one is liable for a harmful result due to the failure of the security system, whatever its cause and whatever the diligence used, in the obligation of means it is sufficient to establish technically adequate measures and to implement and use them with reasonable diligence.

However, this argument in favour of the CISO does not mean that his or her actions are not subject to other types of responsibilities.

3.    International approaches to the CISO responsibilities

Other countries also consider the strategic role that the CISO has in cyber incident management, not only in the strictly technical field, but also in the business field. In this case, the US Federal Trade Commission (FTC), in its capacity as the supervisory body for the proper functioning of the market, filed a lawsuit before a New York court on 30 October against the CISO of the company Solarwinds, known for being the victim of a serious cyberattack in October 2022 that led it to paying a compensation of 26 million dollars, and which has also recently been the victim of a new incident, known as Sunburst.

In this case, the FTC accuses the CISO and the company itself of defrauding investors for not being diligent in implementing cybersecurity measures and for failing to inform shareholders and adequately mitigate the cybersecurity risks and vulnerabilities faced by the company ("alleging they defrauded investors by talking up SolarWinds' cybersecurity practices and downplaying or failing to disclose known risks").

As can be seen, the grounds affecting this case are not eminently technical, but economic. In other words, the omission of clear and complete information about the actual state of a company's cybersecurity can cause serious damage to the rights of investors in that company. And it is the company's responsibility to ensure that the rights of the market in general and investors in particular are protected.

This is yet another example of cybersecurity going beyond the technical to become a purely business and sometimes even market competition issue.

One of the main obstacles that traditionally existed when it came to properly managing a cyber-attack had to do with the pressure on the CISO of the affected company to be held internally responsible for not having been able to foresee it or not knowing how to handle it in time. In fact, the CISO was sometimes dismissed after a cyber-attack of a certain magnitude, in the belief that by dismissing this professional the company was justifying the incident as a purely human error caused by one of its employees, which could mitigate the reputational impact of the incident.

In fact, what was achieved was nothing more than adding more pressure on an expert who is already under great pressure to resolve security incidents that are becoming more numerous and technically more complex.

In this sense, the current cybersecurity legislation seems to protect the CISO and exempt him (to a certain extent) from sole responsibility for the occurrence of the incident. As a matter of fact, the new regulation consolidates the principle of shared responsibility, in the sense that, although the CISO may be liable for his actions during incident management (in the same way as the DPO is with respect to the performance of his tasks), the ultimate responsibility for making decisions related to the implementation of appropriate, sufficient and proportionate technical and organisational measures, as well as for supervising their effectiveness, lies with the entity's governing body, especially in the case of essential, important and critical entities.

Actually, the commonly known as the NIS Directive2 , currently being transposed into Spanish law, already mentions this in Article 32.6, when it states that "Member States shall ensure that any natural person responsible for or acting as a representative of a critical institution with powers to represent it, the authority to take decisions on its behalf or the authority to exercise control over it has powers to ensure that it complies with this Directive. Member States shall ensure that such natural persons can be held liable for failure to comply with their duty to ensure compliance with this Directive".

In consequence, the entities considered of relevance under this rule cannot discharge their liability for any cyber-attacks suffered, as cybersecurity is a business risk and, hence, a responsibility of their administrators, as it requires decision-making that only corresponds to the governing body within its obligation of diligent management of the business.

This has also been established by the Spanish Supreme Court, in its judgment of 15 February 2022, when it ruled that:

[Although] the disputed question raised serious doubts as to the nature of the security obligations in the field of data protection, in fact the party's argument that we are dealing with an obligation of means and not an obligation of result is accepted.

This implies that in obligations of means the commitment acquired is to adopt the technical and organisational measures, as well as to deploy a diligent activity in their implementation and use that tends to achieve the expected result, with means that can reasonably be qualified as suitable and sufficient for their achievement. Precisely for this reason they are called "diligence" or "behavioural" obligations.

The difference lies in the liability in each case, because while in the obligation of result one is liable for a harmful result due to the failure of the security system, whatever its cause and whatever the diligence used, in the obligation of means it is sufficient to establish technically adequate measures and to implement and use them with reasonable diligence.

However, this argument in favour of the CISO does not mean that his or her actions are not subject to other types of responsibilities.

Other countries also consider the strategic role that the CISO's role has in cyber incident management, not only in the strictly technical field, but also in the business field. In this case, the US Federal Trade Commission, in its capacity as the supervisory body for the proper functioning of the market, filed a lawsuit before a New York court on 30 October against the CISO of the company Solarwinds, known for being the victim of a serious cyberattack in October 2022 that led it to paying a compensation of 26 million dollars, and which has also recently been the victim of a new incident, known as Sunburst.

In this case, the FTC accuses the CISO and the company itself of defrauding investors for not being diligent in implementing cybersecurity measures and for failing to inform shareholders and adequately mitigate the cybersecurity risks and vulnerabilities faced by the company ("alleging they defrauded investors by talking up SolarWinds' cybersecurity practices and downplaying or failing to disclose known risks").

As can be seen, the grounds affecting this case are not eminently technical, but economic. In other words, the omission of clear and complete information about the actual state of a company's cybersecurity can cause serious damage to the rights of investors in that company. And it is the company's responsibility to ensure that the rights of the market in general and investors in particular are protected.

This is yet another example of cybersecurity going beyond the technical to become a purely business and sometimes even market competition issue.

Article provided by INPLP members: Francisco Perez Bes and Esmeralda Saracibar (ECIX Group, Spain)

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Dr. Tobias Höllwarth (Managing Director INPLP)