The UK's current position
The legislative whistleblowing regime in the UK, and the protections it affords workers, have been in place for over a decade. Introduced through the Public Interest Disclosure Act 1998 (“PIDA”)(amending the Employment Rights Act 1996) and framed predominantly as a matter of employment law, the protections it provides are fairly limited: employees can only claim whistleblowing protections, including the protection against retaliation or detrimental treatment, in respect of certain disclosures, and the legislation does not impose any requirements on companies to have systems and procedures in place to enable whistleblowing disclosures to be made. Although there are specific sectors where more detailed and far-reaching whistleblowing requirements are in place (such as the financial services sector), these are by no means comprehensive.
We have for some time been tracking progress of whistleblowing reform efforts in the UK. In an article in September 2020, we noted that two new Private Members’ Bills which looked to reform existing legislation had been presented to the UK Parliament. We predicted that there could therefore be momentum for change to the current UK whistleblowing laws. Recent developments suggest that reform to the whistleblowing framework is once again a focus in the UK. We remain hopeful that we will see developments soon.
Private Members' Bills – revived attempts to reform the whistleblowing framework?
There have been several efforts by individual Members of Parliament to introduce reform to the UK’s whistleblowing framework. Indeed, PIDA was also originally introduced by way of a Private Member's Bill.
In January 2020, the then co-Chair of the UK All-Party Parliamentary Group on Whistleblowing (“APPG”), Baroness Kramer, introduced a Bill to the House of Lords. The Bill aimed to provide for the establishment of an Office of the Whistleblower whose duties would be the administration of arrangements to facilitate whistleblowing. This Bill failed to complete its passage through Parliament before the end of the session.
In February 2020, a second, more ambitious, Private Members' Bill was presented to the House of Commons, sponsored by Dr Philippa Whitford MP. This Public Interest Disclosure (Protection) Bill set out numerous far-reaching amendments of the current framework under UK law, including the establishment of a Whistleblowing Commission; creation of two new criminal offences; and prohibition of non-disclosure agreements. As the 2019-2021 session of Parliament was prorogued, the Bill fell while awaiting a second reading.
On 31 January 2024, the Chair of the APPG, Mary Robinson, presented a third Whistleblowing Bill to the House of Commons which reintroduced the proposal for the establishment of an Office of the Whistleblower. This Bill also called for the repeal of current UK whistleblowing legislation alongside the creation of new offences relating to the treatment of whistleblowers and the handling of whistleblowing cases. New proposed civil penalties, which could amount to 10% of an individual’s gross annual income (up to £50,000) or 10% of a company's annual global turnover1, would also be within the remit of the Office. The Bill is scheduled to have its second reading in the House of Commons on 19 April 2024.
Government review into the UK whistleblowing framework
Continuing the momentum for reform to the current UK whistleblowing laws in the UK is the ongoing review by the Department for Business and Trade into the UK whistleblowing framework (the "Review"), assessing how the framework currently operates, including PIDA and subsequent legislative and non-legislative interventions. The evidence stage of the review was due to conclude in Autumn 2023, and we expect a report to follow soon. Please see our previous Engage article for more information about the Review.
Increasing reliance on whistleblowers in law enforcement
The importance of effective whistleblowing reporting processes is also reflected in an increasing prevalence of whistleblowers in law enforcement cases. In the UK criminal prosecution sphere, the recent conviction for bribery of the Madagascan President's former Chief of Staff revealed that UK-based Gemfields alerted the National Crime Agency ("NCA") to their suspicions that the former Chief of Staff, and her associate, were attempting to solicit bribes from it in exchange for a mining licence. Following the conviction, the NCA stated that they were “particularly grateful to Gemfields for not only bringing this matter to our attention, but also continuing to work with us throughout the investigation to bring about a successful result.” The Crown Prosecution Service also noted that "[b]y reporting the pair to the authorities Gemfields have protected their business and those of others from greedy and unscrupulous individuals.”
In his first official engagement as Director of the SFO, Nick Ephgrave gave a speech on 13 February 2024, in which he stressed the need to focus on intelligence and the information gathered at the outset of a case, including “smoking gun” evidence and getting access to documents which prove the SFO’s case. One way of doing that, he suggested, was to pay whistleblowers. He contrasted the position in the US, and noted that, since 2012, over 700 UK whistleblowers have engaged US law enforcement, commenting that “this is not just about the SFO. I would invite us to think about whether or not we want to consider incentivising whistleblowers, it has many benefits”.
Financial Conduct Authority
A recent report by the House of Commons Treasury Committee into "Sexism in the City"2 found that "whistleblowing processes within financial services firms are often ineffective at tackling bad behaviour or protecting those who report harassment." The report also found that there was limited awareness as to the UK Financial Conduct Authority’s ("FCA") whistleblowing line or how it worked and recommended that the FCA launches an awareness campaign to publicise the availability of its whistleblowing line and improve its effectiveness. We anticipate action from the FCA to address these findings.
On 27 February 2024, the FCA announced its consultation paper CP 24/23 which included its controversial proposal for public announcements of the opening of enforcement investigations. Interestingly, one of the FCA’s stated rationales for this proposal was to help their investigations by encouraging potential witnesses or whistleblowers to come forward: this perhaps supports the findings of the Treasury Committee as to the current limited awareness of the FCA’s whistleblowing line. Indeed, the FCA's most recently published whistleblowing data4 for 2023 Q4 confirmed that its Whistleblowing team received 249 new whistleblowing reports between October and December 2023 – given the number of institutions which are regulated by the FCA, this might be thought to be a relatively low number of whistleblowing reports.
The European Union Whistleblowing Directive
In the EU, the Whistleblowing Directive is now in effect, and businesses with operations in EU member states should have taken proactive steps to address the requirements. These include establishing internal reporting channels, protecting the confidentiality of whistleblowers and ensuring that employees who make whistleblowing reports are protected against any form of retaliation. Although the Whistleblowing Directive has not been implemented in the UK, in practice, many UK-headquartered or UK-based organisations with European footprints have implemented the requirements of the Whistleblowing Directive, to achieve a consistent and integrated approach to their whistleblowing processes across all of their operations, irrespective of location.
House of Lords debate – the US angle
On 11 March 2024, a UK House of Lords debate for the Digital Markets, Competition and Consumers Bill, considered an amendment to that Bill which sought to require the Secretary of State to commission an independent review of the extent to which whistleblowers were adequately protected and supported under the competition and markets regime in the UK. During that debate, Baroness Susan Kramer criticised the UK's lack of safeguards for those who report wrongdoing. Baroness Kramer noted that 25% of open cases at the US commodities regulator, the Commodity Futures Trading Commission (“CFTC”), have a UK-based whistleblower element somewhere within them. Baroness Kramer said it was “disturbing” that the CFTC was doing road trips in the UK to encourage whistleblowers who are aware of financial wrongdoing with any US connection to contact it directly. Baroness Kramer also argued that the EU (by its Whistleblowing Directive) was catching up with the US in recognising whistleblowing as a key tool to expose wrongdoing early and to deter wrongful behaviour, and that it was time for the UK to do the same.
Next Steps
UK reform to current whistleblowing laws appears to be gathering momentum. Organisations should reflect on their current policies, procedures, and importantly resourcing, to ensure that they are fit for purpose. Please contact the Hogan Lovells team for more information on how we can help.
