The ongoing trial of Elizabeth Holmes in relation to alleged fraudulent activities at biotech company Theranos, reminds us of the impact that whistleblowing has had in the life sciences sector. Dr Li Wenliang’s attempts to raise the alarm in relation to COVID-19 at the end of 2019 is another dramatic recent example.
But what are the legal issues arising from whistleblowing? Of course these can be viewed from both the individual whistleblower’s and a business perspective.
In the UK whistleblowers making "qualifying disclosures" may well be protected from suffering a detriment or unfair dismissal under employment law under the Public Interest Disclosure Act 1998 and the Employment Rights Act 1996, and there are certain areas where there are specific protections for whistleblowing (e.g. protections for the Data Protection Officer under data privacy law). Significantly for any business operating across the EU there is a new EU Whistleblowing Directive that must be implemented across the EU by 17 December this year, and amongst other things mandates a whistleblowing policy for businesses over a certain size.
Of course whistleblowing can give rise to allegations of wrongdoing, including breach of confidence, breach of duties of confidentiality in contract, defamation or breach of public law duties of confidence (e.g the Official Secrets Act 1989). Threats to blow the whistle may also be viewed as extortion.
For the individual therefore, it is important to tread carefully in relation to whistleblowing, and to ensure that an appropriate procedure is followed, particularly if looking for protection under law.
For businesses, while it is not mandated in the UK, it is typically advisable to have some form of whistleblowing policy in place. This can assist in shedding light on problematic practices within the business, and to manage these issues appropriately, ideally before they proliferate. Having a whistleblowing policy can also be viewed as an important part of a functional compliance programme, which may have direct benefits for the company (e.g. as a defence to allegations of failure to prevent Bribery, or giving rise to a reduction in fines levied for competition law infringements).
Gustaf Duhs