Gavin Hinks: whistleblowers in the US receive millions of dollars for exposing corporate wrongdoing. Are the UK's incentives lagging behind?
| Position | Opinion |
Whistleblowers are setting new records for sounding the alarm. It was revealed in September that Bradley Birkenfeld, a former banker with UBS, had been awarded $104m ([pounds sterling]65m) for helping to expose tax evasion at the Swiss bank. The US government recovered $5bn as a result of his information and the vast payout was Birkenfeld's reward for having helped.
[ILLUSTRATION OMITTED]
He's not alone. In 2010, the US saw its previous record-breaking whistleblower payout--$96m ([pounds sterling]60m)--after Cheryl Eckard, a former employee at GSK, demonstrated that drug production at the company's Puerto Rico plant was contaminated.
Eckard earned her millions by bringing a lawsuit under the False Claims Act, which allows private citizens to sue those suspected of defrauding the government. If the Justice Department decides that the case has merit, pursues it and then recovers money, the original complainant is entitled to a share.
These are phenomenal sums and observers in the US claim that they are an emphatic reminder of the benefits of whistleblowing. The attractions are obvious. It has also been argued that the $104m payout stands as a beacon for whistleblowers around the world. International companies with US operations could find whistleblowers from elsewhere in the world by-passing their local managers and watchdogs to go straight to Washington.
So what does this mean for other jurisdictions, such as the UK?
Britain has done much on the whistleblower front. The Public Interest Disclosure Act, which became law in 1999, provided protection for the employment status of whistleblowers. In short, you can't be dismissed if you make a "protected disclosure"--those that reveal a criminal offence, a failure to comply with the law, miscarriages of justice, health and safety dangers, environmental risks, or concealing information relevant to offences in these areas. A clause also made it clear that there would be no limit to the compensation that could be imposed should someone be fired unfairly.
But while all this is good, it doesn't really address the incentives issue. True, the Office for Fair Trading retains the power to offer rewards for shining a light on cartel activity, but that's a rather narrow area of business behaviour. What about others?
[ILLUSTRATION OMITTED]
The elephant in...
To continue reading
Request your trialCOPYRIGHT GALE, Cengage Learning. All rights reserved.
