Blowing the whistle: an imbalance of powers

Whether it’s corruption, inequality, dangerous working practices or some other threat to society, whistleblowing is one of the best tools we have to expose wrongdoing. But when someone blows the whistle, does the law offer them meaningful protection from being badly treated as a result?

A study this March by the International Bar Association (IBA) showed that while the UK courts handle more whistleblowing claims than anywhere else, with 224 cases in 2018, only 13.8 per cent of these won at tribunal.

Meanwhile, a damning report by the All Party Parliamentary Group (APPG) for Whistleblowing in November 2020 expressed serious concerns about the way such claims are dealt with in the employment tribunal.

Starting position

In 1998, the UK became a global leader on whistleblowing protection when it introduced the Public Interest Disclosure Act 1998 (PIDA). The PIDA established that any worker who makes a “protected disclosure” must not suffer any detriment at the hands of the employer as a result.

The disclosure must fall into certain categories to count as ‘protected’, but these are broadly drawn – including any potential breach of a ‘legal obligation’, damage to the environment, criminal activity or endangering health and safety.

“A lot of our cases are around breach of employment rights, equal pay, sexual harassment or health and safety breaches”, explains Ruby Dinsmore, principal lawyer in the employment team at Slater & Gordon. “We’re seeing a lot of covid-related issues; for example, people who’ve been forced back into work believing that there are inadequate protective measures in place.”

Whistleblowing is more common in the public sector, perhaps due to greater staff awareness of how to raise concerns. In the private sphere, it’s most common in financial services, where the Financial Conduct Authority (FCA) has imposed extra rules to help whistleblowers; and many financial companies now have confidential whistleblowing hotlines operated by third parties.

What might whistleblowing look like in the law firm context? Naeema Choudry, partner at Eversheds Sutherland, suggests: “In law firms, it could be about malpractice, people working excessive hours, health and safety, overcharging. The implications for law firms would be very significant because of the regulatory aspect, as well as the reputational issues. Firms would need to take it seriously and have proper procedures in place.”

Jumping hurdles

Compared to some employment claims, whistleblowing actions have several advantages. Firstly, there is no cap on damages. Secondly, unlike claims for unfair dismissal, you don’t need to have worked for the employer for two years before you can make a claim.

But the problem is that whistleblowing claims are complex to run. Kiran Daurka, partner at Leigh Day, explains: “One of the difficulties is proving causation – that ‘you dismissed me because of my protected disclosure’. You can guarantee the employer will dredge up everything they’ve got on that person, trying to muddy the waters on causation; for example, performance issues. Also, it’s not easy to show you made a protected disclosure, and to the proper person.”

Choudry adds that the rules require the employee to show that they actually provided ‘information’, rather than just reporting a concern. “That can be very hard for the employee to show,” she notes, “and the requirement is really a bit artificial.”

Fundamentally, the way the law is framed means that there is too much for the employer to argue about.

Charlie Thompson, employment partner at Stewarts, remarks: “These cases are difficult to win and easy to lose. There are so many battlelines, and the employer will argue every single point, for example, that the employee never made a disclosure of information, because there’s no evidence of it – say, if it was raised in a meeting, but nothing was written down.

“Or that the evidence doesn’t show they had a reasonable belief in XYZ; or that the employer didn’t subject them to a detriment, they simply performance-managed them. These claims are easy to tee up, but difficult to run to the end.”

“We see unscrupulous tactics from employers,” adds Dinsmore. “For example, [asserting] that the allegations were made out of sour grapes by a disgruntled employee; trying to make out that the disclosure was made for bad faith reasons.”

Costs are also used as a threat. “The employer will say they’ll go after the claimant in cost costs if they continue,” Dinsmore reports.

Unlike in the mainstream courts, in the employment tribunal each party is responsible for its own costs, whether it wins or loses. But the tribunal will order parties to pay their opponent’s costs in exceptional circumstances – for example, where a case was brought with no chance of success – and so this can still be wielded as a threat to vulnerable employees.

The tribunal costs rules are intended to improve access to the courts, but employers will inevitably have a much bigger budget to spend on the claim. Thompson remarks: “Employers know that by defending themselves vigorously, they can expend their greater resources and sap the resources and the will of the employee.”

“And that problem”, he adds, “is exacerbated by the delays in the under-resourced employment tribunal. There’s a big backlog, that’s grown during the pandemic. Now, the claim won’t be listed for over a year, and in the meantime the clock is ticking and the lawyers’ costs mount up. The other side can do things to increase costs.”

Thompson comments: “Whistleblowing protection could be improved by speeding up the tribunal system. Also, if the employment tribunal were better resourced, it could put its arms around the case more quickly. It could tell the parties what’s expected of them in a preliminary hearing, for example a schedule of loss by X date, disclosure by X date. And it could be scrutinising parties’ conduct and being more robust with employers.”

In the south of the country, some cases are now being listed for 2022. Whistleblowing claims can take longer to come to a hearing, as they often need a full panel rather than a single judge. But the employment tribunal plans to continue the use of virtual hearings in a bid to clear the backlog.

Richard Yeomans, employment partner at Addleshaw Goddard, comments: “We’ve found that the virtual hearings work well. Before, we thought, how can you do cross examination virtually? But it does work…  Once the backlog is cleared, we may find that the system is more efficient and you can get through cases more quickly.”

But Choudry has a word of warning: “The difficulty is where you have a long hearing where there’s a lot of documentation, and you need several screens to look at it. Sometimes litigants-in-person are on mobile phones.”

Going it alone

The APPG’s recent report highlighted another key problem in the employment tribunal: that many claimants do not have a lawyer to help them. According to the report, more whistleblowers self-represent than get legal representation, while employers are securing more expert legal advice than ever before.

Why is it so hard for claimants to find a lawyer to act for them? Whereas ‘no win, no fee’ arrangements are more common in other areas of employment, they are harder to find for whistleblowing claims. Although you might see the occasional big money awards for cases involving ‘career damage’, damages in most cases will be fairly low.

“Damages for injury to feelings will be under £50,000, and that’s for an incredibly strong case”, laments Dinsmore. “And a whistleblowing case might have prospects of 55-60 per cent, but that can change. A lot comes down to the disclosure and to the witness statements of individuals.”

But claimants who don’t have the support of a lawyer are at a distinct disadvantage. Dinsmore notes: “Unrepresented litigants often don’t put their strongest case. They create gaps that the employers can pick holes in. Elements of the claim may be disposed of or struck out at an early stage; and the litigant sees that as the judge making an early assessment of their case, and a lot of them will withdraw. Many claims don’t even make it to the tribunal.”

Judges will do their best to help litigants in person, Choudry stresses. “Often in this type of claim, the claimant will put down pages and pages of narrative. A judge has to help them with the process; for example, helping them identify what was their qualifying disclosure.

“But many people feel that [bringing a claim] is too much for them, and might have a detrimental impact on their career.”

Dinsmore adds: “The judge can only deal with what’s in front of them; so if the case isn’t properly argued, their hands are somewhat tied.”

Statistically speaking

From the employers’ perspective, statistics suggesting that too many whistleblowing claims fail at tribunal are potentially misleading.

For one thing, they don’t show how many whistleblowing claims reach a settlement – which might be a good result for the claimant. For another, they don’t reflect the fact that, as some employment lawyers believe, not all whistleblowing claims are good ones: sometimes they are thrown in to bolster other employment claims because of the uncapped damages, or are brought because the employee did not meet the criteria for other claims, such as unfair dismissal or discrimination.

Sometimes they are erroneously brought by unrepresented litigants who don’t really understand the law; or they might even be cynically deployed as leverage by unhappy employees seeking to exit an organisation on favourable terms.

Daurka is sceptical. “There are always criticisms of claimants bringing unmeritorious claims, but where’s the evidence?” she demands. “The burden is on the claimant to bring all of these points. Sometimes it’s not in the claimant’s interests to include a whistleblowing claim, because it adds to the costs of bringing the case. I really don’t see these claims being thrown in for extra measure. People don’t bring whistleblowing claims lightly. They feel there’s a stigma attached to being a whistleblower.”

Thompson agrees: “It’s fairly exceptional for someone to want to be a whistleblower, and for that to be what defines them. It’s a small world, it gets out. And most people like to have a good relationship with their employer.”

Out of scope

One aspect of the PIDA that feels particularly out of date is the narrow scope of who can benefit from whistleblowing protection, which only applies to ‘workers’.

In Gilham v MoJ [2019] UKSC 44, district judge Claire Gilham took her claim all the way to the Supreme Court to achieve a ruling that judges were workers and fell within the PIDA.

She had raised the alarm over the impact of major budget cuts to the justice system and claimed to have been bullied and undermined as a result.

Daurka acted in the Gilham case on behalf of whistleblowing charity Protect, which intervened in it. It was Protect who pushed for the original introduction of whistleblowing laws in 1998. It is now campaigning for further improvements, including widening the scope of protection to include the self-employed, non-executive directors and trustees, volunteers and job applicants.

Daurka says: “I’ll often be contacted by someone who’s a trustee of a charity, a non-executive director or job applicant, and none of these people are clearly protected at the moment, because they’re not workers.

“Some protections have been added [to the 1998 Act] in piecemeal way, for example job applicants within the NHS are covered. But job applicants in other sectors aren’t protected in the same way – so it’s a much narrower scope than under the Equality Act.”

Righting the wrong

Another big criticism of the current system is that while it seeks to compensate employees who have suffered harm because they blew the whistle, it does virtually nothing to ensure the wrongdoing they flagged in the first place is ever actually addressed.

“The employment tribunal can send details [of the alleged wrongdoing] directly to the relevant regulator, if the claimant gives consent”, explains Choudry. “I’ve seen claims where they tick the box, but what’s not clear is what the regulator actually does with it.”

“At the moment, the whistleblowing legislation has no real bite”, comments Dinsmore. “There’s no onus on the employer to deal with the issue… There needs to be a means of ensuring that the wrongdoing is addressed and rectified. The board members should be named and shamed.”

Protect proposes a new, independent whistleblowing commissioner, with powers to investigate any failure by an organisation to properly follow up on a whistleblowing disclosure.

The new body would have powers to issue civil penalties; and it would set the standards expected of employers and regulatory bodies in relation to whistleblowing. The proposal is one of many contained in a detailed draft bill that Protect published in March.

“The problem with claims in the employment tribunal is that there’s an inequality of arms between workers and employers”, explains Protect’s legal director Sybille Raphael. “The employer has all the documentary evidence; the means to pay lawyers; the testimony from all the current employees who probably don’t want to lose their jobs.

“The worker is in a much more vulnerable position. That problem is heightened in whistleblowing cases, because the protection given by employment rights is not easy to access; you have to jump through various hoops. So we’re hoping to rebalance the system and put more of a duty on employers and regulators to increase protection for the whistleblower and investigate the concerns – with more powers given to the tribunal to sanction when things go wrong.”

Protect’s detailed draft bill might be something of a wish list, but the charity is optimistic that some aspects will be adopted into legislation, potentially through amendments to a new employment bill that – at time of writing – is expected to be included in the Queen’s Speech on 11 May.

Raphael anticipates that some reforms will garner widespread support. She comments: “Our view is that there are some aspects of our draft bill that will be less controversial. For example, the standards and procedures for employers – I think some employers will be quite happy to get them, because it will give them precise guidelines as to what they need to do.

“The financial sector has already introduced similar rules. We think that will be an easy win.”

More controversially, Protect proposes reversing the burden of proof in whistleblowing claims, to put the burden on the employer to show, for example, that a worker was not sacked because they blew the whistle.

Could this be a step too far, and encourage unmeritorious claims? “‘I don’t think so”, says Raphael. “If you dismiss someone, you should have a reason. I don’t see why [employers] shouldn’t have to prove the reason.”

Protect hopes for cross-party support in relation to whistleblowing reform. Raphael says: “We believe whistleblowing is good for businesses. It’s one of the safest and easier risk management tools that an organisation has at its disposal.

“The government has indicated that it wants to review the whistleblowing framework; and our view is that whistleblowing is even more important in today’s world. After all, if we had listened to Doctor Li Wenliang in Wuhan, we probably wouldn’t be in the middle of a pandemic now.”

Rachel Rothwell is a freelance journalist