Greg Wright: The economic case for protecting whistle blowers

WHISTLEBLOWING can take you to a lonely place.

Andrew Patrick from Harrogate who is campaigning to increase protection for whistleblowers.

In an ideal world, anybody who sees wrongdoing should be able to report it without fear of recriminations. In reality, speaking up can destroy your career and wreck your finances.

The threat of being placed on a blacklist or denied a reference is often enough to enforce an uneasy silence. Employees may know their company is up to no good, but they fear the consequences of placing their head above the parapet. So misconduct goes unpunished. Workers are bullied. Customers are cheated. Taxes are avoided. And the whole of society suffers.

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But it doesn’t have to be like this. It is possible to create a culture that celebrates the whistleblowers’ courage and moral fibre. In order to do this, we need action at Government level and a national debate about the ordeal faced by whistleblowers.

Kate Kenny, of Queen’s University Belfast, who has conducted a study on whistleblowers, said: “As long as we as a society play along and turn a blind eye to the whistleblower’s plight, the organisations, who are in reality the true transgressors, will continue to have their way.”

Ms Kenny was the co-investigator on a report compiled by Professor Marianna Fotaki, of Warwick Business School, which looked at the fate of 25 whistleblowers from the UK, Europe and the US. It makes depressing reading. The whistleblowers lost their jobs. Some were fired, while others faced psychological pressure that made them quit.

A survey carried out by the law firm Slater and Gordon concluded that a third of British workers would be worried about blowing the whistle on illegal or dangerous activities by their employer. More than half of the respondents said they wouldn’t speak out because they were worried about losing their job. However, almost half (49 per cent) said they would blow the whistle if they had legal protection from being maltreated at work and would get financial compensation if they were sacked.

This is where we might be able to learn something valuable from across the Atlantic. Mary Inman, a partner at the law firm Constantine Cannon, believes the formation of a new parliamentary group could be the start of a new era in whistleblower protection. Her client, Andrew Patrick, from Harrogate, was the second British whistleblower to receive a financial reward under the US False Claims Act.

The prospect of a Government-backed reward would certainly encourage more people to take the brave first step of confronting their employer’s bad behaviour.

It is hoped the newly created All Party Parliamentary Group on Whistleblowing will consider the case for a new, broadly-based US-style reward system for whistleblowers. But a more radical approach is needed. We must create a new Office for Whistleblowers which would be a first port of call for all whistleblowers, regardless of their job title or sector.

It would be, in effect, a body that had the authority to regulate the regulators.

Ms Inman believes the economic benefits would be extraordinary.

She said: “The American experience has helped to expose financial frauds to the levels of multiple billions of dollars that we would not have known about otherwise.”

In the US, whistleblowers are regarded as a powerful law enforcement tool. If you are a busy prosecutor, you are always going to take the whistleblower’s case first, because they are giving you a map to the fraud. A tip-off from an insider can save months of wasted effort.

There have been steps in the right direction. In the UK. The Competition and Markets Authority (CMA) is encouraging witnesses to come forward who can help smash illegal cartels. The CMA is urging people who have witnessed illegal activity to report it, by offering a reward of up to £100,000.

But we need a new strategy to tackle a deep-rooted problem.

An Office for Whistleblowers would be responsible for developing a consistent and supportive approach towards people who have risked their careers to halt misconduct.

Our corporate world would become a better place.