In the midst of a renewed debate in the U.K. around offering monetary awards to whistleblowers who report corporate crimes, a newly published paper by leading whistleblower attorney and author Stephen M. Kohn revisits and refutes prior arguments made against the implementation of whistleblower awards in the U.K.
Examining 14 years of data around the whistleblower provisions of the United States’ Dodd-Frank Act, Kohn, a founding partner at Kohn, Kohn & Colapinto, shows that widely-cited arguments against whistleblower awards do not align with empirical evidence.
In February, Nick Ephgrave QPM gave his first public speech as Director of the United Kingdom Serious Fraud Office (SFO) during which he expressed a desire to pay awards to financial fraud whistleblowers in the U.K. Whistleblower advocates have long pointed out the whistleblowers in the U.K. are flocking to U.S. whistleblower programs which, unlike their counterparts in the U.K., offer monetary awards.
In the paper, “Revisiting The Arguments Against Whistleblower Award Laws: It’s Time for a Change,” Kohn goes through seven of the main arguments laid out in a 2014 report by the Bank of England which recommended that the U.K. not implement whistleblower awards. Kohn shows that the arguments are disproven by the mounting evidence around the effectiveness of Dodd-Frank’s award provisions.
“As the United Kingdom and other countries around the world are looking for effective models to incentivize and protect whistleblowers it is important to rely on empirical data to understand what laws work, and what laws do not work,” Kohn writes. “[The Bank of England’s] report on the Dodd-Frank Act was published shortly after the law was passed and was not based on empirical data. Despite this weakness the report was heavily relied upon and was used in a highly influential Transparency International analysis, published online, discussing the pros and cons of award laws”
“But 14 years after Dodd-Frank was passed, and after over 85,000 whistleblowers have filed claims, and hundreds have collectively obtained almost $2 billion in compensation, empirical data exists to objectively evaluate the Dodd-Frank structure for whistleblowing protection. The data supports a finding that the Dodd-Frank program for incentivizing, protecting, and compensating whistleblowers works well and does not result in the negative findings feared by the [Bank of England].”
Further Reading:
Revisiting The Arguments Against Whistleblower Award Laws: It’s Time for a Change
