In the US, whistleblowers who assist in the successful prosecution of tax fraud can receive a ‘reward’ of up to 30% of the money collected. Similar ‘reward schemes’ operate in relation to other fraudulent behaviour, which impacts the state. So, should we take a leaf out of the US playbook and roll out similar reward schemes here in the UK?
What does the Serious Fraud Office think?
Currently, only about 5% of the SFO’s active fraud investigations result from ‘tip-offs’ from whistleblowers. This contrasts starkly with the position in the US, where the comparable figure is much higher. Whilst we have laws in place to protect whistleblowers from dismissal or other detrimental treatment, do we need to go further and provide a financial incentive?
In its recently published ‘business plan’, the SFO has indicated in its foreword that it is keen to push ahead with new initiatives to ‘incentivise’ whistleblowers. We already have some smaller incentive schemes in operation here in the UK. The HMRC, for example, can issue financial rewards on a discretionary basis. Likewise, the Competition and Markets Authority can reward those who assist in the identification of illegal cartels. So, having dipped our toes into the water, is it time to dive right in?
Do these reward schemes work?
Similar schemes operating in the US and Canada suggest that they can be successful in encouraging whistleblowers to cooperate with authorities in the successful prosecution of fraud and other similar cases. However, there are bound to be legitimate concerns about the negative impact these schemes could have. Could they encourage false reporting, in the hope of receiving a financial windfall? Could they undermine or call into question the veracity of the evidence provided by whistleblowers? More fundamentally, should we be paying people simply for doing the right thing?
What do you think?
This debate throws up some interesting moral, ethical, legal and financial questions. What are your thoughts on the matter? Would a financial incentive make you more likely to blow the whistle? Get in touch and let us know what you think.
James qualified as a solicitor in 2001, having completed his academic studies at the University of Sheffield. Throughout his career, he has worked for a number of prestigious regional law firms, joining stevensdrake as Head of Employment Law in 2012.
As well as pursuing and defending the full range of Employment Tribunal claims, James spends a considerable amount of his time providing advice and support to businesses of various sizes. He advises on a wide variety of HR and employment law issues, including employment contracts, HR processes and procedures, grievances, disciplinary issues, absenteeism, performance management and settlement agreements. He also regularly helps clients with redundancy exercises and internal reorganisations.
James has previously been described as an ‘Associate to Watch’ by Chambers UK, an independent guide to the legal profession. His clients regard him as “thorough”, “easy to work with” and someone who avoids blinding them with legal jargon.
Outside of work, James balances family life with ambitions of swimming, running and cycling a bit faster.
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