LONDON, 14 February 2023: Protect, the UK’s leading whistleblowing charity, has applauded a decision by the European Court of Human Rights (ECtHR) to rule in favour of ‘Luxleaks’ whistleblower, Raphael Halet. In a judgment published this morning, the court has reversed a previous decision by the lower chamber – which upheld the decision of the domestic courts.
In a previous decision, the court found that Mr Halet’s actions did not meet the criteria established by case law for a valid whistleblowing case. The information he had provided was not considered “vital, new or previously unknown”. It ruled that the domestic courts had struck a fair balance in the present case between the need to protect the rights of the applicant’s employer on the one hand and the need to protect the applicant’s freedom of expression on the other. Mr Halet’s criminal conviction for passing on the information was not considered a violation of his rights.
However, the Grand Chamber has now ruled that the public interest in Mr Halet’s disclosure outweighed the employer’s interest in confidentiality, confirming his status as a whistleblower. The Grand Chamber considered the lower court had focused solely on the harm sustained by PWC, rather than the wider societal interests in tax avoidance, and had not given due consideration to the chilling impact of criminalising a whistleblower.
Elizabeth Gardiner, Chief Executive at Protect, said:
“This was the right decision by the ECtHR, although it is unfortunate that Mr Halet had to contend with such a lengthy process and legal complexities to be recognised as a whistleblower.
“When Mr Halet blew the whistle the Luxleaks scandal was still ongoing – and in a situation like this, there is no such thing as too much scrutiny. It is a testament to the continued importance of whistleblowing to ensuring large companies adhere to standards of openness, compliance and good practice.
“UK law needs to be reformed in light of this judgment to ensure criminal offences and civil penalties strike the right balance between commercial confidentiality, and the ability for whistleblowers to expose wrongdoing in the public interest.”
As a result of this morning’s judgment, The ECtHR held that Luxembourg was to pay Mr. Halet €15,000 in respect of non-pecuniary damage, and €40,000 in respect of costs and expenses.
In 2012, former PricewaterhouseCoopers (PwC) employee Raphael Halet disclosed internal company documents to French journalist Edouard Perrin, helping to uncover a whole financial system of tax avoidance known as ‘Luxleaks’.
Because of this disclosure, Luxembourg courts prosecuted Halet on several charges, including internal theft, breach of professional secrecy and breach of trade secrets, and sentenced him to a €1,000 fine.
Halet then appealed the Luxembourg courts’ decision in the ECtHR, alleging that his conviction by the Luxembourg courts amounted to a disproportionate interference with his Article 10 right to freedom of expression of the European Convention on Human Rights (ECHR).
In 2021, the ECtHR upheld the Luxembourg courts’ original decision, and found that the courts had not violated Article 10 of the ECHR by convicting a whistleblower for disclosing confidential tax documents to a journalist during the Luxleaks scandal.
On balance, the ECtHR held that the harm to PwC’s reputation and loss of client confidence outweighed the general interest in Halet’s disclosure. The Court also noted Halet’s “disinterested nature” when disclosing the documents as a mitigating factor when deciding the level of fine to impose.
The case was heard a second time in the ECtHR’s Grand Chamber last year to reconsider whistleblowing protections in the case, after whistleblower protection experts raised the alarm on the first ECtHR decision.
Find out more about Protect here.
Meg Tillay at Byfield Consultancy
Tel: 0204 558 6113