UK companies report rise in whistleblowing

A survey of UK companies by the international law firm Fulbright & Jaworski has found that there has been a substantial increase in proportion of businesses that had been subject to whistleblowing.

The survey found that 37 percent of companies reported being the target of whistleblowing in 2012 – up from 21 percent in 2011 and 6 percent in 2009. Almost three-quarters of the whistleblowing allegations caused an internal investigation and just under 50% led to the instigation of a probe by the relevant regulatory authority.

It was suggested that one of the potential reasons for the increase in the number of companies reporting whistleblowing was the implementation of better reporting structures since the passage of the Bribery Act in 2010. Under the Bribery Act companies can defend themselves better against corruption allegations if they can show that there was a formal, transparent grievance procedure in operation which would have dealt with any complaints of corruption or bribery. The implementation of these systems may have allowed for the improved cataloging of complaints regarding whistleblowing.

However, the incidence of whistleblowing in the United Kingdom is still much lower than the United States, where 80% of companies reported being the target of a whistleblower last year. This may be because the financial incentives that are present in the US system (such as rewards from whistleblowers from institutions such as the Securities and Exchange Commission) are currently not available in the United Kingdom.

So, what is whistleblowing under UK law? “Whistleblowing” is the generic name for the making of a protected disclosure under the Public Interest Disclosure Act 1998 (“PIDA”). Under PIDA workers can disclose information relating to a “qualifying disclosure” to an appropriate person and – if their disclosure meets the requirements – then it is treated as a “protected disclosure” for the purposes of the Act. A “qualifying disclosure” is the disclosure of information which shows that the following is happening, has happened or is likely to happen: a criminal act, damage to the environment, a breach of a legal obligation, and danger to the health and safety of other workers or third persons (among other things). The disclosure should be made internally to the employer, normally, but can be made to a third party in appropriate circumstances (such as a lawyer or a Minister of the Crown). Internal disclosures are encouraged but they may not always be possible – for example, where management at the business is implicated in the act which is being complained of. If the whistleblower is dismissed or subjected to a detriment because of the fact that they’ve made a protected disclosure then they receive enhanced protection under the Employment Rights Act 1996. It’s therefore extremely important that whistleblowing allegations are dealt with fairly and efficiently by the business that is the subject of the whistleblowing allegations.

Redmans’ employment law solicitors deal with whistleblowing allegations for employees and employers,