A Beginner's Guide to Data Protection Impact Assessments (DPIA)

In simple terms, a Data Protection Impact Assessment (or "DPIA") is a risk assessment, which is legally required under the EU and UK GDPR when making certain decisions about the use of personal data. For organisations procuring new technology that will interact with personal data, or contemplating projects with a personal data focus, a data protection impact assessment is used to assess and mitigate data protection risks.

In this article, we provide a beginner's guide to data protection impact assessments, from what they are, to when you need to do one. 

In this article, we’ll cover:

• What is a data protection impact assessment?
• When might a data protection impact assessments be carried out?
• What are the stages of a data protection impact assessment?
• Common challenges with DPIAs
• Do I need a data protection impact assessment?
• Tackle data protection impact assessments with expert lawyers

Without further ado - let's get into it!

What is a data protection impact assessment?

A Data Protection Impact Assessment is a process used by organisations that are processing personal data, and which helps the business to identify and mitigate potential privacy risks. 

They are legally required under the UK and EU GDPR in certain circumstances, and are used to evaluate the impact of data processing activities, and serve as an important step towards robust data protection compliance. It can also have the added benefit of building trust with an organisation's customers, by proactively addressing how best to protect their privacy rights.

When might a data protection impact assessment be used?

Generally, you'll need to conduct a DPIA if your data processing is likely to result in a high risk to the rights and freedoms of individuals. But how can you determine that? It can help to ask these questions to see whether a DPIA is needed:

• Are you processing sensitive data on a large-scale?
• Are you using new technologies that might affect privacy rights and responsibilities? 
• Does the project involve automation that could result in legal issues?

These questions can help unearth the level of risk a project entails - and allow you to confidently assess when a DPIA is, or isn't, required. 

Let's dive deeper into the key stages of conducting an effective DPIA.

What are the stages of a data protection impact assessment?

DPIAs allow you to identify and mitigate data protection risks in projects involving personal data. As a preventative measure, these assessments allow you to highlight risks, and limit the costly reality of their impact.

At a glance, the process of a DPIA involves a few key steps:

Identify a need for a DPIA

First, you'll need to determine if your data processing activities are likely to result in high risks to an individual's privacy rights and freedoms.

Describe the data processing

Next, (if a DPIA is in fact, necessary) you'll need to clearly outline the nature, scope, context, and purpose of your data processing activities.

Address necessity and proportionality

Following this, you'll need to assess whether your data processing is actually necessary for your intended purpose. In some circumstances, you may want to consider implementing alternative, less intrusive methods.

Identify and assess risks

Next, you'll need to identify and document the potential risks, in addition to assessing their potential scope. This might include things like a data breach, or the misuse of personal data.

Mitigate risks

Based on what you've identified in the previous stage, you'll need to outline the steps that will be taken to mitigate risks. This might include choosing not to collect certain types of data, implementing strict security controls, setting up deletion schedules for data that is no longer needed and ensuring that data subjects are kept fully informed of all personal data uses and given the option to object - and many other practices, which together can form a rigorous data protection framework, designed to safeguard personal data.

Record outcomes

Finally, you'll want to document the outcome of your DPIA. You'll need to record the process itself, its results, actions proposed, and frameworks put in place. While this is best practice, it also shields your business in the event of an audit or regulatory enforcement further down the line.

Common challenges with DPIAs

While a DPIA can help you to systematically analyse, identify, and mitigate data protection risks - the process can come with several challenges.

Complexity of data processes

Particularly where you are considering implementing new technology, it can be difficult to understand, or sometimes even to discover, the exact data processes that will be involved.  Some providers (especially where they are located outside the UK and EU) are less in tune with what their customers will require and may not be immediately forthcoming with the information needed.

A data protection expert may be able to help you assess the processes, and the likely risks associated with them - they may even have dealt previously with the technology provider you are looking to procure new technology from, which can significantly shortcut the process.

Stakeholder involvement

A well-governed DPIA will rely on stakeholder input from all corners of your organisation. While this ensures a thorough approach, it can slow down and frustrate the process.

Fostering a sense of accountability when it comes to data protection can help here, with staff understanding that robust data governance is a joint effort and responsibility.

Need for legal expertise

A DPIA is a legal requirement under the UK and EU GDPR. As a result, getting it wrong, or worse - failing to do it - can have grave, business-wide complications. From costly fines to the erosion of customer trust, you want to ensure you avoid the risks that come with data protection failures.

Although it is rare for a fine to be levied simply for failing to conduct a DPIA, the DPIA is a significant tool in every business’s armoury to avoid GDPR breaches that could lead to fines.

Under the EU GDPR, failure to comply with the GDPR can result in fines of up to €20 million or 4% of annual global turnover (whichever is higher).

Under the UK GDPR, failure to comply with the GDPR can result in fines of up to £17.5 million or 4% of global annual turnover (whichever is higher). 

For companies that lack internal data protection expertise, it can be wise to invest in the support of a data protection lawyer - who can help you approach DPIAs in a methodical fashion, ensuring that the resulting assessment is comprehensive and minimises your risk.

What are the other benefits of conducting a data protection impact assessment?

The benefits of a data protection impact assessment go far beyond a legal tick-box exercise. While they are a legal requirement, they also go a long way towards: 

• Risk management: A DPIA will help you identify and mitigate potential data-based risks within your business.
• Compliance: A DPIA will ensure your business is compliant with data protection regulations while preparing you for potential audits down the line. 
• Transparency: A DPIA is a commitment to the data rights of individuals while demonstrating to internal stakeholders that the business takes privacy seriously. This fosters a sense of trust with customers, and accountability within the business itself. 

Overall, a well-managed DPIA is a key component of a robust data protection strategy - and by understanding when and how to implement one, you'll equip your business with a strategic advantage.

Tackle data protection impact assessments with expert lawyers

Data protection impact assessments are important to get right, with the failure to do so potentially resulting in:

• Regulatory enforcement action under the GDPR
• Financial penalties
• Exposure to customer compensation cases
• Collapse of customer trust
• Reputational damage for the wider business 

As a result, it's crucial that your approach to DPIAs is compliant and strategically sound.

Unsure if you need to conduct a DPIA? Preparing to initiate one? Or just need advice on your data protection strategy as a whole? Biztech Lawyers is an international law firm, with data protection expertise spanning the UK, EU, US, and AU. 

Get in touch today to discover how we can help make DPIAs a strategic advantage within your business.