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When Serious Fraud Office director Nick Ephgrave suggested in his maiden speech that whistleblowers should be financially incentivised, he reopened a well-worn but fundamentally unresolved debate.
Only two UK agencies run schemes that reward individuals who successfully report wrongdoing that results in successful actions against the wrongdoers: the Competition and Markets Authority operates a scheme under which whistleblowers may be awarded in relation to information on illegal cartel activity; and individuals who report tax fraud may also be rewarded at the discretion of HM Revenue & Customs.
While some argue that whistleblowers deserve compensation for the significant repercussions they may suffer, others say that individuals should speak out in response to a sense of duty rather than in the hope of receiving a financial reward.
The UK statistics seem to suggest that relying on ‘doing the right thing’ as the key motivator for whistleblowers is not working. The Financial Conduct Authority receives, on average, only 200 to 300 whistleblowing reports per quarter.
The CMA, despite offering financial rewards for information which helps it detect, investigate and enforce against cartel behaviour, saw a 70 per cent drop in the number of reports from 2017 to 2022. This led the CMA to increase the maximum potential financial reward available from 100,000 to 250,000, the implication being that the CMA regards financial incentives as key...
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