The role of legal counsel in ransomware response – cyber divergence on display

Two publications released earlier this month illustrate different views on how to structure ransomware response, and in particular on how to structure the involvement of legal counsel.

On Wednesday of last week, the Ontario Ministry of Government Services issued a bulletin entitled “What is Ransomware and How to Prevent Ransomware Attacks” to the broader public sector. It features a preparation and response playbook that will be much appreciated by the hospitals, universities, colleges, school boards and municipalities targeted by the MGS.

The playbook treats ransomware response as primarily a technical problem – i.e., a problem about restoration of IT services. Legal counsel is mentioned in a statement about incident preparation, but is assigned no role in the heart of the response process. Indeed, the MGS suggests that the Information and Privacy Commissioner/Ontario is the source of advice, even “early on” in an incident:

If you are unable to rule out whether or not PII was compromised (which will likely be the case early on in an incident), contact the Privacy Commissioner of Ontario (416) 326-3333.

Contrast this with what Coveware says in its very significant Q3 ransomware trends report that it released on November 4th. Coveware – arguably the best source of ransomware data – explains that data exfiltration threats now feature in 50% of ransomware incidents and that ransom payments are a poor (and becoming poorer) method of preventing threat actors from leaking what they take. Coveware says:

Accordingly, we strongly advise all victims of data exfiltration to take the hard, but responsible steps. Those include getting the advice of competent privacy attorneys, performing an investigation into what data was taken, and performing the necessary notifications that result from that investigation and counsel.  Paying a threat actor does not discharge any of the above, and given the outcomes that we have recently seen, paying a threat actor not to leak stolen data provides almost no benefit to the victim. There may be other reasons to consider, such as brand damage or longer term liability, and all considerations should be made before a strategy is set.

The Coveware view, shared by Canadian cyber-insurers, is that ransomware is primarily a legal and reputational problem, with significant downside legal risks for institutions who do not engage early with legal counsel.

I favor this latter view, and will say quite clearly that it is bad practice to call a privacy regulator about a potentially significant privacy problem before calling a privacy lawyer. A regulator is not an advisor in this context.

This is not a position I take out of self-interest, nor do I believe that lawyers should always be engaged to coordinate incident response. As I’ve argued, the routine use of lawyers as incident coordinators can create problems in claiming privilege when lawyer engagement truly is for the “dominant purpose of existing or anticipated litigation.” My point is that ransomware attacks, especially how they are trending, leave institutions in a legal minefield. Institutions – though they may not know it – have a deep need to involve trusted counsel from the very start.