Whistleblowers: should they get more protection?

The process could be simplified.

With the current emphasis on corporate governance and paying your fair share of tax, whistleblowing is centre stage - isn’t it time the government revisited our laws in this controversial area?

With major scandals affecting our MP’s, financial institutions, the media and the police it is little wonder that by the end of 2012 corporate governance was the new “black” in the business world and looks set stay. The emphasis upon appropriate corporate controls and culture has been reinforced by the highly publicised tax offensive targeting the former no man’s land of offshore companies and bank accounts.

The overriding theme is clear - times are difficult, mistakes have been made and businesses and individuals have a duty to do the right thing.

Unfortunately, there is not a lot of money available to help promote this cultural shift and so 2012 also saw publication of the government’s plans for the introduction of deferred prosecution agreements – the newest weapon in the cash strapped armoury of the Serious Fraud Office (SFO) – where, if the case is suitable, entities self reporting on fraud can hope to do a deal. It is no coincidence that this has been put in place with an anticipated 2013 focus from the SFO and its new director on enforcing the provisions of the Bribery Act.

One has only to look carefully at the UK government’s guidance on whistleblowing to see where the problems lie

The SFO’s confidential reporting hotline is also doing brisk business and the soon to be reconfigured FSA has had a whistleblowing hotline for many years. So-called “bounty payments” by HMRC have also been in the press where informants have received discretionary payments for information that has led to additional tax recoveries.

In this climate the role of the whistleblower has never been more prominent and yet UK legislation does little to recognise the increased importance of this role. Any auditor will tell you that two of the most effective weapons a business can deploy against fraud are the establishment of a zero tolerance culture backed up by a fraud reporting hotline available to employees, customers, suppliers and anyone else who has dealings with the company.

In the UK whistleblowing legislation is set out within the Public Interest Disclosure Act 1998 although this will be amended by Vince Cable’s Enterprise and Regulatory Reform Bill which is expected to become law later this year and will remove a loophole where concerns about a personal employment contract could be raised.

Unfortunately, it is proposed the whistleblower will now also have to decide what is in the public interest.

In an environment where government, regulators and prosecutors are seeking to both reinforce and enhance controls within the business and wider community a more fundamental review of whistleblowing legislation in the UK is long overdue.

One has only to look carefully at the UK government’s guidance on whistleblowing to see where the problems lie. Potential whistleblowers are invited to check their employment contract or HR department to ascertain if their company has a whistleblowing procedure.

If I were an employee I would already be worried – the process seems likely to become legal and HR departments are not renowned for supporting the employee in a matter involving the behaviour of management. What do I do if I’m not an employee but a third party or a sub- contractor and if I am an employee what do I do if there is no whistleblowing policy? Government guidance fails to clearly address these points and the law itself is unclear.

The rest of this article appears on economia.

whistleblowing is centre stage. Photograph: Getty Images

Paul Smethurst is a partner in the forensic and investigation practice at accountancy firm, Carter Backer Winter LLP

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Police shoot man in parliament

A man carrying what appeared to be a knife was shot by armed police after entering the parliamentary estate. 

From the window of the parliamentary Press Gallery, I have just seen police shoot a man who charged at officers while carrying what appeared to be a knife. A large crowd was seen fleeing from the man before he entered the parliamentary estate.

After several officers evaded him he was swiftly shot by armed police.

Ministers have been evacuated and journalists ordered to remain at their desks. 

More follows. Read Julia Rampen's news story here.

Armed police at the cordon outside Parliament on Wednesday afternoon. Photo: Getty

George Eaton is political editor of the New Statesman.