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.
