The UK’s Public Interest Disclosure Act 1998 and the subsequent Enterprise and Regulatory Reform Act 2013 was introduced by the UK government to provide legal protection for people voicing concerns whether internally, to regulators, or to the media in industries across the UK.
At present, relevant employers are under no legal or regulatory duty to have whistleblowing arrangements in place. Many do, regarding it as good practice in the fight against fraud, corruption and other wrongdoing, although implementation may be inconsistent across many industries.
Despite the government’s intention to encourage a speak-up culture, whistleblowers up and down the country have often continued to suffer mistreatment or retaliation when reporting genuine wrongdoing, a fact reported by the UK government in their ‘call for evidence’ in 2013.
However, one industry appears to have taken the lead in changing their staff’s fears. In 2013, in the wake of the LIBOR scandal, the Parliamentary Commission on Banking Standards (PCBS) recommended that financial institutions put in place mechanisms to allow and encourage their employees to raise concerns in the banking sector.
As a result of the PCBS recommendations, new rules to encourage a culture in which individuals raise concerns and challenge poor practice and behaviour have now been published by the FCA and Prudential to improve accountability in the UK banking sector.
The rules which take effect in September 2016 apply to deposit-takers (such as banks, building societies, credit unions) with over £250million in assets, and to insurers who will now need to:
• appoint a non-executive director to be the whistleblowers’ champion
• put whistleblowing arrangements in place that are able to handle all types of disclosure from all types of persons
• put text in settlement agreements explaining that workers have a legal right to blow the whistle
• ensure that nothing in any employment contract or settlement agreement prevents or discourages an employee from making a protected disclosure
• put in place "reasonable measures" to ensure that whistleblowers are not victimised
The introduction of these rules come at a time when support for whistleblowers appears to be increasing. Only this month, one of the leading global whistleblower law firms, who have brought cases to date that have resulted in more than $12billion in recoveries, and more than $1billion in rewards for clients, opened up an office in central London.
Given the introduction of FCA rules and the introduction of specialised law firms representing whistleblowers, UK businesses in the financial services industry must ensure that they can effectively deal with the increase in persons who may now be preparing to come forward.
One way for businesses to prepare for an increase in whistleblowing is to make use of external and independent whistleblower providers such as SeeHearSpeakUp whose experience in this industry will help organisations comply with these new rules and at the same time safeguard their finances.
By Sean McAuley, Fraud Services Senior Manager, email@example.com