Goldman Sachs whistleblower and the law

Posted by Christie Malry on December 10, 2011 at 12:00 pm

Twitter is getting very upset at this news:

A solicitor at HM Revenue & Customs who turned whistleblower to disclose that senior managers had quietly let off Goldman Sachs from paying millions of pounds in tax penalties is facing disciplinary procedures and possible prosecution for speaking out.

There's an awful lot of nonsense being written about this. So here are a couple of observations:

The Public Interest Disclosure Act

The concept of 'whistleblowing' has its own Act under UK law. It's called the Public Interest Disclosure Act 1998 (PIDA). I'm not a lawyer, but in broad terms the Act protects employees who make a 'protected disclosure' from any recrimination from their employer, after making the disclosure.

A protected disclosure is defined in section 43B of the Act; it is one which shows (a) a criminal offence has been, is being, or is likely to be committed; (b) a person is failing to comply with a legal obligation; (c) a miscarriage of justice has occurred, is occurring, or is likely to occur; (d) health and safety of an individual is endangered; (e) the environment has been, is being, or is likely to be damaged; or (f) information has been concealed in respect of any of (a) through (e). Where an employer takes recriminatory action against an employee who has made a protected disclosure, they may be liable for damages and PIDA made these damages potentially unlimited.

There's a load more information about PIDA over at the excellent Public Concern at Work website.

Mba's legal position

It all therefore hinges on whether Mba's disclosure is a 'protected disclosure'. This is a matter of law, and it looks like 43B(b) is his most likely defence. If it's deemed that Hartnett was failing to comply with a legal obligation, Mba is in the clear. If it's not, then he may struggle. But if he has made a protected disclosure, then HMRC making his time a misery will come back to haunt them. Or, rather, it will come back to haunt us, because ultimately taxpayers will foot the bill for any compensation that HMRC may have to pay.

Unfortunately PIDA doesn't protect employees from the negative actions that may be taken by future employers. So if Mba looks to get another job, there's not much he can do to stop employers from blacklisting him.  Although other employers may be impressed by such a public display of integrity.