HM&P lawyer shared with HTV the topic "Businesses proactively prevent legal risks in the digital era"

The strong shift of business activities to the digital environment is posing new requirements on legal governance for businesses. Not only has the number increased, but legal risks have also become more multi-layered and difficult to control due to the combination of data, technology, and cross-border factors. Recently, a representative of HM&P Law Firm ("HM&P"), Managing Partner Nguyen Van Phuc had an exchange with Ho Chi Minh City Television (HTV) revolves around the topic "Businesses proactively prevent legal risks in the digital era", thereby providing many practical analyses and recommendations to help businesses build an effective risk management system that is suitable for modern business models.

Although the legal system is relatively complete, many businesses have not yet established appropriate mechanisms for storage, control and evidence

The picture of legal risks in the digital era

According to Lawyer Phuc, businesses are currently facing four prominent groups of legal risks, including: risks related to personal data protection, cybersecurity, the application of artificial intelligence (AI) and digital platforms, as well as cross-border legal risks.

Notably, as data becomes a central element of business operations, the collection, processing, and exploitation of data if not strictly controlled can lead to disputes with customers, sanctions, or unpredictable legal risks. At the same time, the use of international platforms or data storage abroad also increases the possibility that businesses will be governed by many different legal systems.

Reasons for increasing legal risks

From a practical perspective, Lawyer Phuc believes that legal risks in the digital era are increasing and becoming more complex due to the following three core reasons:

• The speed of technology development far exceeds the speed of legal perfection: Many new business models based on data, digital platforms or AI do not have a specific regulatory legal framework, creating "legal gray areas" and making it difficult for businesses to handle disputes.
• An increasingly non-traditional and multi-layered business model: A digital platform can simultaneously play multiple roles such as sales, payment intermediaries, advertising, and data processing, resulting in significantly more complex determination of liability between parties.
• Cross-border nature of digital transactions: Business activities can involve many countries, many different legal systems and compliance standards, causing businesses to face multi-dimensional legal risks when disputes occur.

Legal "bottlenecks" and the current situation of risk management of enterprises

An important point is emphasized that the current legal "bottleneck" does not lie in the lack of regulations, but in the ability of businesses to control and prove compliance. Although the legal system is relatively complete, many businesses have not yet established appropriate mechanisms for storage, control and evidence. Common situations include not recording the customer's consent, failing to prove that the entity entered into the electronic contract or not clearly stipulating intellectual property rights in the contract with a third party.

At the same time, practice shows that many businesses still tend to "handle disputes when they arise" instead of proactively preventing them early. The reason comes from the mindset of considering legal as a cost, lack of an internal governance system, prioritizing growth over control and underestimating risks. Lawyer Phuc commented:

"In a digital environment, a lack of preparation for data and evidence control can put businesses at a disadvantage from the moment a dispute begins."

At the end of the discussion with HTV, Lawyer Phuc emphasized that in the digital era, businesses need to proactively build a legal risk management system in the direction of integration right from operation, including risk identification, standardization of internal processes, etc  establish a control mechanism and prepare response scenarios, and design an appropriate dispute resolution mechanism right from the contract signing stage. Legal, accordingly, is no longer a tool to handle consequences, but must become a risk control platform from the beginning, helping businesses identify early, respond effectively and maintain sustainable growth in the digital business environment.

Read more: Doanh nghiệp chủ động phòng ngừa rủi ro pháp lý trong kỷ nguyên số