Don’t forget data
What about data, another vital cog in the outsourcing machine? A brave new world is shortly to begin, when the General Data Protection Regulation (GDPR), which was agreed in Brussels in 2016, becomes enforceable in 2018. The GDPR will affect the vast majority of businesses in the EU, and it packs a punch: failure to comply with new, tightened rules of the processing of personal data runs the risk of a maximum penalty of the greater of €20 million or 4% of a company’s worldwide turnover. Does Brexit mean UK businesses are free of the GDPR?
Not a bit of it. The UK government confirmed it would implement the GDPR, meaning that UK businesses need to be compliant by the time it is enforceable on 25 May, 2018. And albeit that Britain, post-Brexit, is a work in progress, with regard to data it is clear either that the GDPR will continue to apply – if, for example, Britain joins the European Economic Area – or that the country will continue to operate a legal framework that is the same or very similar to the GDPR – as, indeed, is the case with the raft of EU legislation that will fall under the Great Repeal Bill.
In a dynamic, rapidly evolving political and economic scene, you need to know what’s tucked away in your commercial agreements – and keep a keen eye on the regulatory landscape. On top of that, be nimble: quickly responding to changes will help ensure that your business rides outsourcing’s looming challenges – and makes the most of its opportunities.
Translated into contractual language and approaches, this means ensuring flexibility in matters such as pricing and tax (bearing in mind the potential imposition of WTO tariffs), change control procedures and allowing for termination in circumstances which may not necessarily be confined to breach but also where the cost of providing the services becomes uneconomic. Amid so much flux, one thing, for in-house counsel and information officers, is crystal clear: the need for a contractual stocktake is paramount.
John Buyers is a commercial outsourcing and information technology specialist at international legal practice Osborne Clarke.