Should The UK Allow Payment for Whistleblowers? 

The negative connotations attached to whistleblowing can have disastrous impact upon a worker’s career after they make their disclosure should no legal protection scheme exist for them. Many of these whistleblowers will faced with the possibility that potential future employers form a negative view of their character based on the decision to disclose an workplace grievance.

Some alterations have occurred in certain working sectors, such as those made earlier this year for child care workers, as well as those made for businesses that are regulated by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA). However, there are still crucial issues involving whistleblowing that are yet to be resolved

Beginning in September 2016 a series of new measures were introduced; most notable of which is a requirement for businesses to employ an employee who will act as a ‘whistleblowing champion’ to bear responsibility for encouraging and supporting staff members with work related grievances. This change in law also means that internal whistleblowing policies within businesses must also be put in place so that every disclosure receives the same treatment.

The British government spoke decisively about the need to establish ‘effective protections’ for whistleblowers at the 2016 Anti-Corruption Summit. This included frank discussion about the reward systems used by the FCA and PRA. However, no revision of this kind was agreed upon.

One of the most interesting, and legally provocative, ideas put forward is the offer of financial rewards for whistleblowers. Such a model has been used extensively in the USA where whistleblowing actions are more frequent. The Securities and Exchange Commission (SEC) is a particularly prolific agency that has adopted a scheme of financial reward for whistleblowing.

Since its Whistleblower Programme was introduced in 2011, the SEC has spent over $100 million on rewards across 14,000 separate cases of whistleblowing from 95 countries worldwide.

Mary Jo White, Chair of the SEC, has spoken of the programme as “a game changer for the agency […].providing a source of valuable information to the SEC to further its mission of protecting investors, while providing whistleblowers with protections and financial rewards“.

These figures appear to show the scheme as a clear success for US government agencies and the individual whistleblowers concerned, so it’s no surprise that it has resulted in sharp debate as to whether Britain should adopt a similar programme. The Home Office recently discussed the potential benefits of such a change amid reports that the number of whistleblowing cases have already jumped in Britain, which some observers believe is a direct response to the possibility of gaining financial rewards began.

However, introducing a policy of this nature in Britain may be jumping the gun somewhat, as recent changes to employment law for the benefit of whistleblowers, such as employing champions and encouraging business transparency for workers, is yet to be fully explored. British and American employment differs considerably, as as such, there may not currently be a need to embrace financial rewards, especially as the promise of money may lead to many false claims being generated, which may ultimately reflect badly on both the whistleblower and the business concerned.

The Financial Conduct Authority promptly refuted the notion of money being a good means of encouragement in an analysis that concluded: “research shows introducing financial incentives for whistleblowers would be unlikely to increase the number or quality of the disclosures we receive.”