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Whistleblowing and self-reporting
Are whistleblowers protected in your jurisdiction?
The Public Interest Disclosure Act 1998 protects whistleblowers from detrimental treatment by their employer. A disclosure which, in the employee’s reasonable belief, shows that a crime has been committed, is being committed or is likely to be committed will be treated as a “qualifying disclosure” for the purposes of the act.
The act operates to ensure that workers have the right not to be subjected to detriment as a result of having made a qualifying disclosure. Where employees suffer detriment, they can bring a case before an employment tribunal which has the power to award unlimited compensation.
The act does not oblige employers to have a policy either on the reporting of impropriety concerns or a procedure for making disclosures. However, it would be sensible for companies to do so. For financial services firms, Financial Conduct Authority (FCA) guidance encourages them to set appropriate internal procedures for handling employee concerns and sets out guidelines for firms to consider when implementing an internal whistleblowing policy. Whistleblowers can also contact the FCA or the Serious Fraud Office (SFO) directly.
Is it common for leniency to be shown to organisations that self-report and/or cooperate with authorities? If so, what process must be followed?
As discussed above, there is significant advantage for a company that identifies potential bribery or corruption within its organisation to instruct lawyers and, if appropriate, self-report as soon as possible.
The SFO must demonstrate to the court that a deferred prosecution agreement (DPA) will be in the interests of justice; thus, early cooperation is key if a company wants to enter into a DPA and avoid the reputational damage that comes with a prosecution and conviction. The court must be satisfied that there is sufficient evidence for a realistic prospect of conviction and that the public interest would be best served by a DPA instead of prosecution. Some of the factors that will be taken into account include:
- the value of any gain or loss;
- the risk of harm to the public or unidentified victims;
- the impact on financial markets and international trade; and
- the impact of the offence in other countries.
ICBC Standard Bank and XYZ are the only cases to date resulting in a DPA. The SFO has been clear that cooperation will include access to witnesses in internal investigations and their original accounts. What is evident from these two judgments is that early cooperation with the SFO is essential for an agreement to be reached and will result in a significant reduction in the fine to be paid.
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