At this year’s National Law Journal (NLJ) Regulatory Summit in Washington, DC, held on December 1, 2014, speakers focused on the current and future of the federal regulatory landscape in the United States. Highlights included:
- Former Congressional Leaders Speak on Future Trends in Health Care and Other Sectors
The featured speakers included former U.S. Senate Majority Leader Tom Daschle and Former Speaker of the House of Representatives Dennis Hastert.The former congressional leaders spoke of the current political division between what Daschle described as “rugged individualism versus collective action.” While acknowledging an increased divide between political parties, the speakers hoped to see possible movement in some areas, possibly in the areas of Medicare, Medicaid or tax reform.Much of their discussion focused on health care issues as prominent areas of focus going forward, although they predicted more action in the courts and at the state level than at the federal level.Trends to watch for included a movement away from fee for service, and also continued emphasis on wellness extending beyond the health care sector and into businesses themselves as a way to reduce health care costs.
- Warning of Increased Regulatory Enforcement Action
The increasingly aggressive stance that federal agencies are taking with respect to compliance and enforcement, and what firms can do in response, was the subject of discussion.One panelist observed that we may see more industry challenges against government enforcement against what is perceived by some as unreasonable overreaching of regulatory authority.
There was a prediction that there will be increased penalties for regulatory noncompliance.It was noted that the Department of Justice (DOJ) collected $24.7 billion in civil and criminal penalties in 2014, as compared to $8 billion in 2013. Penalty actions have spanned a wide variety of matters, and while financial services cases continue to be of high appeal, speakers predicted that there will be broadening areas of enforcement scrutiny, including in automotive and retail sectors.It was noted that, while global regulatory integration is increasing, U.S. enforcement continues to predominate amongst comparable regulatory jurisdictions.
Companies were advised to have a written compliance program and to ensure that the program is properly implemented and maintained, and that those efforts are documented.Those steps could improve regulatory compliance and enable the company to defend against any future compliance enforcement matter. Those programs may include provisions for preparing for inspections and investigations before crisis hits.It was further observed that companies often encounter problems when they are too siloed and leave compliance and legal allies out of the loop until too late in the process, causing issues with document preservation and privilege.
- Cybersecurity Identified as More Than a Privacy Issue, But a Safety Issue Too
Another panel discussed cybersecurity as an area of growing concern.While addressing the topic of information security, the panel also honed in on the potential for cybersecurity breaches to implicate human safety and lives.For example, cyberhacking could be used to control medical instruments, drive or stop automobiles, or control other devised in ways that could results in serious injury or death.
For these safety reasons, in addition to the publicity surrounding high profile retail data breaches, the panel expects increased government attention to cybersecurity issues, with government approaches in the telecommunications field as a possible bellwether for the cyber arena.Companies should monitor and adopt industry standards for encryption and other cybersecurity defense to mitigate against breaches, and against government intervention or punitive measures.Like with compliance programs, companies need to have cyberattack plans in place in advance and execute them in a cohesive way to be effective in reducing the damage of the attack itself, as well as the resulting repercussions.
While this year’s NLJ summit covered a varied collection of industry sectors and topics, the overwhelming take away was that regulatory compliance and enforcement actions are only increasing, and companies should be prepared before a crisis arises in order to reduce the risk of penalties.