UK on Verge of Establishing Stronger Protections for Whistleblowers

UK Whistleblower

The momentum behind the efforts of whistleblower advocates in the UK to pass the Protection for Whistleblowing Bill was palpable in London last week as whistleblowers, advocates, and industry experts gathered in Parliament for the “Whistleblowing Awareness Week Follow-up Event.”

The conference, organized by WhistleblowersUK, featured a packed agenda, including sessions on the importance of whistleblowers in combatting corruption in the financial, Tech/AI, and healthcare industries. The discussions addressed how current UK whistleblower laws hurt whistleblowers and cover-up crime.

The proposed legislation would address many of these concerns and establish a dedicated Office of the Whistleblower. It would also eliminate restrictive Non-Disclosure Agreements (NDAs).

Whistleblowing – a regulatory issue, not an employment issue:

UK whistleblower advocates are pushing to establish a designated Office of the Whistleblower, purporting it will resolve many problems with the current convoluted whistleblowing framework.

Currently, UK whistleblowers are protected by the Public Interest Disclosure Act of 1998 (PIDA), which states that whistleblowers may obtain a remedy if they are hurt, suffer detriment, or are dismissed due to blowing the whistle in the public interest. However, whistleblower advocates say the PIDA is rife with flaws.

Under PIDA, employees must report to their company or a “prescribed” person, such as a regulatory body, to qualify for protection. For whistleblowers in the financial sector, the prescribed body to report to is the Financial Conduct Authority (FCA).

UK whistleblowers shared their challenging experiences navigating the FCA in the conference’s session on combatting financial crime. For some, the FCA only took up their investigation after they realized that U.S. regulatory officials had begun investigating.

One whistleblower called the FCA complaint process a “sham,” explaining how the authorities processing their extremely sensitive claim did not understand the whistleblower provisions of PIDA and, therefore, violated their right to identity protection during the investigation. The FCA issued them a public apology for misrepresenting PIDA laws.

Another whistleblower said they alerted the FCA about a money laundering scheme in which a Colombian cartel laundered over 200 million through UK-based banks, and FCA regulators refused to do anything about it.

UK whistleblower advocates explained that the FCA acts as both a regulatory and enforcement agency, preventing it from effectively investigating whistleblower complaints. To succeed in its regulatory duties, regulators establish strong relationships with firms. Subsequently, regulators tasked with overseeing whistleblower cases sometimes share confidential and protected information with the corporations under investigation, resulting in high retaliation among whistleblowers who report to the FCA.

Under PIDA, when a whistleblower does suffer detriment or loses their job due to whistleblowing, they may obtain a remedy. However, whistleblowers must go through an Employment Tribunal in order to do this. Legal representation within the employment tribunal is costly, and cases are seldom successful. Only 12% of whistleblowers whose cases go to preliminary hearings at Employment Tribunals in England and Wales are successful.

“Whistleblowing is not an employment issue,” explained Iain Mitchell KC, who chairs WhistleblowerUK’s Legal Panel and drafted the language for the proposed Bill. “Whistleblowing, at its core, is about regulation, and the law must reflect that. Courts should process whistleblower claims as crimes, rather than as human resources dispute.”

Mitchell explained that the UK is currently in danger of regulatory paralysis. As legislators attempt to respond to rampant money laundering and financial crime within the UK, their over-regulation causes legitimate, smaller businesses to close, while larger companies can allocate resources to compliance while continuing to find loopholes.

According to Mitchell, establishing an Office of the Whistleblower would act as natural regulation. Since financial crimes occur under the veil of secrecy and the typologies of financial crime change too frequently for regulators and legislators to keep up with, the most effective way to combat fraud, corruption, and money-laundering is to effectively protect whistleblowers who witness such crimes, which the Office of the Whistleblower would accomplish.

Defining Protected Disclosures and Ending Restrictive Non-Disclosures

The Protection for Whistleblowing Bill would define “protected disclosure” as anybody who discloses information made in the public interest to the office of the whistleblower or a relevant person to make that disclosure, such as an employer, a regulator, a public authority, or an organization with a statutory obligation to safeguard. The Bill defines a whistleblower as anybody who makes a protected disclosure.

Advocates say this definition is essential to ensure that the criteria to qualify as a whistleblower are broad. During the conference’s session on Tech and AI, industry leaders explained how AI companies can become whistleblowers based on information gathered through their algorithms. For instance, one AI start-up called Permutable AI has developed algorithms that identify discrepancies between corporate compliance reports, statements to investors, and other data to track ESG fraud. The algorithm also identifies when companies remove media statements, such as ESG projections, as signals that companies may have deceived investors.

According to UK advocates, a critical component of the Bill is the establishment of procedures for handling protected disclosures, including preserving the confidentiality and anonymity of the whistleblower and criminalizing those who subject a whistleblower to detriment (i.e., retaliate against a whistleblower). The Bill tasks the Office of the Whistleblower with processing disclosures, by referring the investigation to the appropriate agency or conducting its own investigation.

Conference attendees expressed that while protections for whistleblowers technically exist under PIDA, they do not exist de facto because whistleblowers are usually forced to report to their own organizations, revealing their identities. During the conference, NHS whistleblowers discussed how the NHS avoids violating PIDA by finding other reasons to fire whistleblowers. In fear of reputational damage, whistleblowers say, NHS and other government entities and corporations spend resources suppressing whistleblowers and creating a culture of fear around reporting rather than addressing the criminal allegations and public risks reported by whistleblowers.

The creation of the Office of the Whistleblower allows for the de facto realization of whistleblower protections by creating a mechanism to anonymize whistleblowers, which would protect them from retaliation.

Section 22 of the Bill would prohibit agreements containing confidentiality and equivalent clauses, commonly called restrictive non-disclosure agreements (NDAs). The Bill states, “Any agreement between a relevant person and any other person is void in so far as it purports to prevent or restrict that other person from making a protected disclosure.”

The prohibition of restrictive NDAs would ensure that no whistleblower could be silenced in a settlement or pre-emptively in an employment contract.

Georgina Halford-Hall, CEO of WhistleblowersUK, said, “This Bill is about protecting whistleblowers, but foundationally, it’s about protecting the public. Failing to properly protect whistleblowers and respond to their claims is often quite literally a life-or-death matter, whether it’s NHS whistleblowers reporting malpractice or whether its corporate whistleblowers reporting the money laundering of terrorist finances through banks in London.”

Galvanizing supporters to pass the Bill

The Protection for Whistleblowing Bill has tri-partisan support, with Mary Robinson (Conservative MP), Susan Kramer (Liberal Democrat in HoL), and Margaret Hodge (Labour MP) leading the charge. This broad support demonstrates that best-practice whistleblower programs in the UK are not politically controversial but are, in fact, politically strategic.

In the wake of the tragic Lucy Letby case, attitudes towards whistleblowing among the general public are high in the UK. In the Letby case, the NHS dismissed whistleblowers who reported a nurse endangering patient safety. That nurse was later found to have murdered seven babies and injured multiple others. This resulted in public anger, as many believe the tragedy could have been prevented if the whistleblowers had been listened to rather than retaliated against.

Despite the positive attitude towards whistleblowing within politics and among the public in the UK, there remains a dangerous culture of fear surrounding whistleblowing in individual organizations, agencies, and corporations. However, participants in the conference were confident that a legislative change would also drive a cultural change within these institutions.

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