When the widespread power and internet outage struck the whole of Spain, Portugal and parts of France recently, businesses of all sizes found themselves unexpectedly offline.
Retailers were unable to operate tills or process card payment machines; restaurants found themselves turning customers away, unable to cook, with degrading freezer stock becoming unusable by the hour. Supermarkets were shut to the public, individuals panicking to get their hands on cash were met with closed banks and cash machines in darkness. Traffic lights and road signals were off, flights were cancelled, large organisations suffered a complete lack of visibility over operational processes, the list went on.
Whilst confirmation about what caused the shutdown of power to these nations remains unclear, it nevertheless provided insight into the level of disruption that can be created without warning and served as a wake-up call for those businesses who found themselves unprepared.
As a law firm advising business owners on compliance and risk management, this incident was more than just a technological failure. It was a compelling case study in business risk, one that underscores the far-reaching ramifications of not having business continuity processes in place.
Why does this matter to your business?
Crises such as a shutdown of power will create general and widespread disruption for all; however, there are consequences specific to each business that should be reviewed and managed to minimise:
- Paralysis of operations
- The risk of accidents occurring
- Safety hazards
- Breach of contractual obligations
- Data loss or compromise
- Security vulnerabilities increasing the risk of theft or attack
- Damage customer trust and brand reputation
Legal obligations and risk management
We cannot ignore that climate change, geopolitics, cybersecurity threats and ageing infrastructure are threat multipliers.
Business continuity planning isn’t just best practice; it is a legal necessity. Financial institutions, healthcare providers, and businesses handling sensitive data are already subject to regulations that mandate continuity strategies and crisis management protocols. More widely however, failure to have an actionable continuity plan could result in legal action. Courts increasingly expect companies to demonstrate foresight and preparedness in their operations – fail to prepare; prepare to fail comes to mind.
Actionable steps for business owners
1. Review Contracts: Understand contractual obligations and liabilities in the event of service disruption.
2. Develop a continuity plan: Ensure clear protocols for communication, data backup, alternative operations and recovery timelines.
3. Training: Ensure staff know what to do in the event of a business disruption event and where to find further information.
4. Test plan regularly: Conduct drills to ensure all systems are fit for purpose and carry out gap analysis to eliminate or minimise disruption.
5. Investment: Invest in alternative supplies, backups and connectivity options.
The recent outage across Europe should serve as a stark reminder that unexpected disruptions can and will happen, and when they do, the legal and financial fallout can be severe for businesses that have failed to heed the warning and taken steps to prepare.
Contact us today to learn how we can provide tailored support for your business needs. For more information, email us at enquiries@haroldandmccormacklaw.com.
Disclaimer: This information is for general information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Please contact us for specific advice on your circumstances.