Whistleblowing and lawyers

Whistleblowing, as we know, is a hot topic, a moral issue that causes a sharp divide. Are the following heroes or traitors: Julian Assange, Edward Snowden, Chelsea Manning? Of course, we should not forget that whistleblowing occurs more usually at a much lower wattage of publicity and politics.

Regarding lawyers, there was the recent case of the in-house lawyer at HM Revenue & Customs who wrote in confidence to the National Audit Office and two parliamentary committees in 2011 saying that the then head of tax at HMRC had ‘let off’ Goldman Sachs from paying at least £10m in interest. HMRC hunted the whistleblower down using the Regulation of Investigatory Powers Act.

His belongings, emails, internet search records and phone calls, and the phone records of his then wife, were examined – even though HMRC later admitted that the organisation had made a mistake in approving the deal.

And now the European Commission has published a public consultation on whistleblower protection. For the commission, whistleblowing is seen as a key tool in the EU’s fight against organised crime, financial and tax fraud, money laundering and corruption, among other things.

There are some questions of interest for lawyers in it, and as usual they focus on legal professional privilege. For instance, is professional privilege a reason for not whistleblowing? Does whistleblowing undermine trust between clients and service-providers like lawyers? Should professional secrecy obligations be balanced with the right of the public to know when their interests are at risk? These questions are another sign of how professional secrecy is coming under pressure from policy-makers, who seem to view it more and more as an obstacle to the greater public interest.

The background document, published with the consultation, draws attention to the role of whistleblowers in detecting fraud and corruption in particular. It cites a 2016 study by the Association of Certified Fraud Examiners which analysed more than 2,400 cases of fraud in 114 countries, and found that about 40% of all detected fraud cases are uncovered by whistleblowers.

Whistleblowers are in the European news anyway. Just a few days ago, a court in Luxembourg decided to reduce the sentences on appeal of two ‘Luxleaks’ whistleblowers. ‘Luxleaks’ was the leaking of thousands of documents from PricewaterhouseCoopers to reveal tax breaks for multinational firms. The tax rulings were made during the time of Jean-Claude Juncker’s premiership of Luxembourg, and much embarrassed him when he became president of the European Commission.

Although the whistleblowers’ prison sentences were reduced (and were always suspended anyway), the news reignited the question of whether the two should have been criminalised in the first place.

It is good to learn that the UK comes well out of EU and global comparisons of whistleblowing legislation. Our Public Interest Disclosure Act 1998 (PIDA) is seen as a beacon of good practice. The European Commission cites evidence that our law increased the willingness to report cases of suspected fraud, bribery or corruption. So this is an area where Brexit will not make any difference, at any rate within the UK. However, UK companies and firms with branches in the rest of the EU should take note that there will in due course be harmonisation of standards elsewhere in the EU.

You can find out everything you want to know about the operation of PIDA - a guide to PIDA, case studies, an advice line, cases decided, policy papers - from Public Concern at Work, a whistleblowing charity.

The commission’s consultation is in its standard format these days. There are questions with pre-set multiple-choice answers, which are rendered childish by their black-and-white bald statements (‘Do you think whistleblowing should be protected? Yes/No/Don’t know’). There is no room for nuance. For some questions, there is a box where you are allowed about a half-a-dozen lines of further explanation. At the end, there is an option to upload an additional paper or background information.

But I have no confidence that such a document will be read carefully, particularly since the notice says: ‘The optional document may serve only as additional background reading to better understand your position, so shall not replace the response to the questionnaire.’

This is the modern way, where everything is simplified so that a computer can process the information. This not only gives a bias to the outcome, since it emphasises the content of the questions asked, but also infantilises thought by discarding nuance and complexity. This must not happen to online justice when it is similarly streamlined with pre-set questions.

The commission is very keen to hear from everyone in response – judges, prosecutors, ombudspersons, and professional associations, for instance. Lawyers are not mentioned by name, but, as we have seen, are key players. The deadline is 29 May 2017.

Jonathan Goldsmith is a consultant and former secretary-general at the Council of Bars and Law Societies of Europe, which represents around a million European lawyers through its member bars and law societies. He blogs weekly for the Gazette on European affairs