A proposed SFO scheme to pay whistleblowers has sparked fears about fair trial safeguards. Could such an initiative also prove a ‘moral hazard’ that weakens corporate governance?
A Serious Fraud Office incentive scheme for corporate whistleblowers proposed by the government – something former director Nick Ephgrave pushed for during his tenure – has prompted mixed responses from the legal profession. Though many seem intrigued by the concept of US-style rewards for reporting economic crime, others have questions.
A government consultation, which closes on 8 January, proposes that individuals could be eligible for a reward if the information they provide leads to a corporate conviction or alternative enforcement action.
A reward would be funded from a proportion of the financial penalty paid by the offender, meaning the whistleblower would get their money only once the case has finished and all appeal rights are exhausted. The consultation seeks views on whether to impose a cap on the maximum payout, and on whether a criminal offence should be introduced for those who knowingly make false reports under the scheme.
The consultation also asks whether the existing whistleblowing framework is ‘operating effectively and, if not, how it should be reformed’.
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Neil Swift, partner at international firm Peters & Peters, said a reward scheme could have implications for the SFO’s workload. ‘The SFO will have to be prepared to filter very many more snippets of...
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