Whistleblowing in the UK

November 2016  |  FEATURE  |  FRAUD & CORRUPTION

Financier Worldwide Magazine

November 2016 Issue

November 2016 Issue


To be a whistleblower, first and foremost, requires courage. Courage to speak up about illegal or fraudulent actions which, once reported, could lead to unwanted consequences for the person blowing the whistle – such as possible stress, an unsupportive workplace, or a detrimental impact on family life, not to mention the possible impact on future career prospects.

Yet for all the high stakes involved, the protection available to whistleblowers following an allegation or disclosure of wrongdoing can be somewhat hit and miss. This can be the case in the UK, where the Public Interest Disclosure Act (PIDA) 1998 is the main recourse – legislation that is viewed by some as currently offering whistleblowers inadequate protection.

UK whistleblower protection is the subject of a new report by the Thomson Reuters Foundation and the charity Blueprint for Free Speech entitled ‘Protecting Whistleblowers in the UK: A New Blueprint’ – essentially an indictment of the current measures in place to shield employees from being harassed or fired if they report instances of crime and corruption in their workplace.

Supporting the view that whistleblowing is becoming more of an issue in the UK is analysis by the whistleblowing charity, Public Concern At Work (PCAW) – ‘Whistleblowing: Time for Change’ (August 2016) – which reveals that calls to the PCAW whistleblowing advice line have increased by 25 percent since 2011. Sixty-nine percent of callers at first tried to raise their concern internally. Additionally, Financial Conduct Authority (FCA) figures for 2014/15 showed a 28 percent year-on-year increase in whistleblowing disclosures.

In terms of resolutions, the PCAW data notes that four out of five whistleblowers reported a negative final outcome, with 29 percent victimised, 28 percent dismissed, 2 percent bullied and 24 percent forced to resign.

Adequate to the task

With the Thomson Reuters/Blueprint for Free Speech report suggesting that the PIDA is no longer (or perhaps never has been) up to the task of fully protecting the interest of whistleblowers in the UK, many feel the legislation should be amended to improve outcomes for UK Whistleblowers now.

“The UK legislation should be revised to fully reflect international principles, including those established by the Council of Europe, and best practice,” says David Lewis, professor of employment law and head of the Whistleblowing Research Unit at Middlesex University. “For example, legislation should require all employers to have whistleblowing procedures, and a statutory code of practice should be introduced to provide guidance. Moreover, a public interest disclosure agency might be created to assist and advise workers and employers on the subject, to represent those who are victimised, to educate the public and to monitor the impact of the legislation.”

The protection available to whistleblowers following an allegation or disclosure of wrongdoing can be somewhat hit and miss.

There is anecdotal evidence among legal practitioners of increased enquiries from UK whistleblowers, especially those working in the City of London. However, for Paul Daniels, a senior principal lawyer at Slater Gordon, there are two key changes that need to be made: first, to grant guaranteed anonymity for whistleblowers, and second, to provide more financial incentive and help to those who blow the whistle. “Another way would be to award punitive damages against employers who retaliate against genuine whistleblowers,” he suggests. “This should give those who speak out more confidence that their concerns will be taken seriously and not dismissed.”

US whistleblowing

Many whistleblowing practitioners in the UK contend that much can be learnt from their counterparts

in the US, in terms of what robust whistleblowing legislation should look like. “In the US, the protection for whistleblowers is much stronger,” observes Mr Daniels. “Government bodies like the Securities and Exchange Commission can pay a financial reward – typically at 10 to 30 percent of the recovery made – to whistleblowers that help them take action. In one case, a whistleblower received a reward of US$30m for providing information about a fraud that led to a substantial recovery by the federal government.”

However, despite the merits of the US approach, Mr Lewis argues that a reward system is appropriate in the US because of the lack of employment rights and job security that exists. He also asserts that many whistleblowers both in the UK and elsewhere would be offended at the suggestion that they are motivated by money; rather, they are often highly moral people who simply want wrongdoing rectified.

A new model

Whether the adoption of whistleblowing legislation more akin to the US is the solution or not, what is abundantly clear is that current UK protection measures are inadequate and a new model is required.

To this end, the PCAW is now calling for ‘a root and branch review of PIDA’ by the UK government, a course of action that it says will lead to the embedding of good whistleblowing policies and procedures across organisations.

As Mr Daniels attests: “If we are serious about stamping out fraud and illegal practices in UK companies, we need to give even more protection and incentives to UK whistleblowers.”

© Financier Worldwide


BY

Fraser Tennant


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