Dimitrios Kafteranis* and Stelios Andreadakis**
Photo credit: CherryX, via Wikimedia Commons
*Assistant Professor in Law, Centre for Financial and Corporate Integrity, Coventry University
** Reader in Corporate and Financial Law, Brunel University London
The Grand Chamber judgment of the European Court of Human Rights (ECtHR) on 14 February 2023 on the case Halet v. Luxembourg is a victory for whistleblowers and the right to freedom of expression. The long-awaited judgment has put an end to a legal battle of more than 10 years for Raphael Halet and rectified the previous decisions of the Luxembourg Court of Appeal and of the third Chamber of the ECtHR. The Court stated that whistleblowers should be protected under Article 10 of the European Convention on Human Rights (ECHR) when they report facts of public interest. The tax matters at hand were of public interest and the Court made a significant statement in that regard by protecting Mr Halet, who did not report an illegal practice or a wrongdoing, but “certain information that concerns the functioning of public authorities in a democratic society and sparks a public debate, giving rise to controversy likely to create a legitimate interest on the public’s part in having knowledge of the information in order to reach an informed opinion as to whether or not it reveals harm to the public interest”.
The Court had to decide whether Mr Halet’s criminal conviction, following the disclosure by him to a journalist of sixteen documents issued by his employer had amounted to a disproportionate interference with his right to freedom of expression. The Luxembourg Court of Appeal had decided that the damage that Mr Halet caused to his employer, PricewaterhouseCoopers (PwC), is not outweighed by the interest in having the information. This position was confirmed by the third Chamber of the ECtHR. The Grand Chamber referred to its established case law and the famous Guja criteria. These criteria are: (1) the channel for disclosure, (2) the public interest, (3) the authenticity of the information, (4) good faith, (5) damage to the employer and an assessment of whether such damage outweighed the public interest, and (6) the sanction imposed. While the Grand Chamber examined the six criteria again, the focus was on the fifth and sixth criterion.
First, the Court clarified that the criteria should be examined without a specific order as there is no hierarchy or order to be followed in their examination. Concerning the balancing of the public interest in the disclosed information and the detrimental effects of the disclosure, the Court did not consider it as a conflict of rights (as suggested by the Luxembourg government). It examined, instead, whether the domestic courts struck a fair balance between, on the one hand, the public interest of the disclosed documents, and, on the other hand, the entirety of the harmful effects arising from their disclosure. The Grand Chamber stressed that the Luxembourg Court’s requirement of “essential, new and previously unknown” disclosed information is not relevant. The Court highlighted that a public debate may be ongoing and additional information can come at a later stage. The fact that a public debate on tax practices was already in progress in Luxembourg could not reduce the relevance of the disclosed documents. The Court actually spent several paragraphs in its judgment on the importance of the debate around taxation and dubious practices of tax avoidance and tax optimisation extensively used nowadays. It is sometimes necessary for the alarm to be raised several times on the same subject before the public authorities, or the society as a whole, are mobilised and exercise increased vigilance.
On the issue of balancing the damage to the employer and the need of the public to be informed, the Court took a different stance compared to the previous decisions. While it acknowledged the detrimental effect of the disclosures on PwC, it was decided that the Luxembourg Court of Appeal did not sufficiently justify why the damage suffered by PwC had not been outweighed by the general interest. The criticism of the Grand Chamber was that the Luxembourg Court of Appeal only referred to “damage to …… image” and “loss of confidence”, but did not enter into details. In fact, PwC had “a difficult year” following the Luxleaks investigations, but quickly increased its revenues and expanded its activities again. The Court concluded that, in the balancing exercise made by the domestic courts, the public interest in the information revealed was analysed narrowly and, on the question of the damage, the Luxembourg Court only focused on the damaged sustained by PwC, disregarding other relevant issues, such as the harm also caused to the private interests of PwC’s customers and to the public interest in preventing and punishing theft and in respect for professional secrecy. As a result, the Grand Chamber found that the Luxembourg Court of Appeal erred on the assessment of this criterion.
Furthermore, the Grand Chamber examined the sixth criterion: the severity of the sanction. It highlighted the importance of whistleblowers for the society, while stressing that any undue restriction on them may have a chilling effect on and dissuade potential whistleblowers to come forward. Regarding the criminal conviction of Mr Halet, the Court concluded that it was not proportionate in light of the legitimate aim pursued and Luxembourg’s interference with Mr Halet’s right to freedom of expression was not “necessary in a democratic society”. The Court awarded €15000 non-pecuniary damage and €40000 covering costs. It should be noted that Mr Halet spent almost ten years in this legal saga, so it is worth considering whether this compensation can really make up for the financial damage he suffered, not to mention the damage to his career and professional standing. It should be taken into consideration that whistleblowers often lose their jobs and have to undertake lengthy and expensive legal battles, thus the courts should, in the future, look for more efficient ways to compensate them.
The joint dissenting opinion of the four Judges at the end of the judgment is also worthy of examination. The four Judges criticised the Grand Chamber’s approach on the notion of public interest, on the importance of safeguarding professional secrecy, on the balancing exercise and on the severity of the sanction. An important comment is that the dissenting Judges referred to Mr Antoine Deltour as a bad faith worker who stole documents. Considering that Mr Deltour was not found to be in bad faith and his “theft” was legally justified due to him being a whistleblower, the use of such characterisations by the dissenting Judges came as a surprise. The reasoning of the dissenting Judges reflects a rather “old-school” analysis of whistleblowing, which questions the co-existence of whistleblowing and professional secrecy as well as its relation to criminal law. The fact that whistleblowers report events, which are not illegal per se, but can initiate a public debate, is significant, as it promotes transparency, accountability and allows the public to find out about instances of wrongdoing. Having said this, it is important to note that everything should be done in a proportionate way and never in bad faith.
Overall, the Grand Chamber’s judgment can be seen as a victory for all unsung heroes, who blew the whistle and suffered retaliation, blacklisting and demotion. The Court sent a message that whistleblowers should be heard and not suppressed. As it was emphasised, the purpose of whistleblowing is not only to uncover and draw attention to information of public interest, but also to bring about change in the situation to which that information relates, where appropriate, by securing remedial action by the competent public authorities or the private persons concerned. This is what Ralph Nader had in mind, when he coined the term for the first time in 1960s: whistleblowing as an alarm mechanism, which aims at alerting, informing, changing, but, above all, protecting our democratic society.
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