The UK government has launched a consultation on reforming whistleblowing laws, seeking to give the Serious Fraud Office (SFO) powers to reward individuals who report economic crime, a move experts view with scepticism.
On Monday, business secretary Jonathan Reynolds and minister for the future of work, Kate Dearden, revealed the government’s plans for a “whistleblowing framework that effectively supports the reporting of serious wrongdoing, while being simple for workers and employers to understand and use.”
Following a review by Jonathan Fisher KC, the government is now consulting on eligibility, reward caps, and whether to criminalise false reports or harassment of whistleblowers under the scheme, which opened on Monday and closes on 8 January 2027.
Former director Nick Ephgrave, who stepped down from the leadership position earlier this year, pushed the government to adopt US-inspired monetary rewards for tips on serious economic crime and corporate fraud to boost enforcement.
Legal professionals, while seeing the value this regime could bring to the anti-fraud agency, raised concerns about how financial motives will play out in front of juries, the moral implications, and potential damage to internal corporate trust.
Jo Mackie, a partner at law firm Michelmores, strongly opposed the scheme, calling it “fundamentally flawed” because it introduces a “moral hazard” in which a whistleblower’s financial motives will always be questioned.
Ian Hargreaves, partner at Quillon Law, highlighted that many believe whistleblowing should be a “public and social duty” rather than a profit-making exercise.
He added: “Whistleblowers must also be protected against retaliation or more sinister treatment, which is covered to an extent under employment legislation, although arguably not as effectively as it should be.”
Difference between the US and UK systems
Legal experts highlighted the difference between the UK and US legal systems, focusing on how the SFO will use information bought from whistleblowers.
Lloyd Firth, partner at WilmerHale, argued the true value of paying whistleblowers isn’t getting them to testify, but getting their “inside track” intelligence so investigators know exactly where to look and who to ask. He said: “It is worth remembering why the SFO has been calling for the introduction of a whistleblower reward scheme. It is for intelligence, not evidence.”
Lucy Blake, partner at Jenner & Block, pointed out a massive hurdle if whistleblowers do take the stand. Unlike the US, where most cases end in plea deals, the UK has many contested jury trials. A whistleblower whose payout depends on a conviction will be cross-examined by defence lawyers, potentially undermining their credibility with a jury.
“It will be interesting to see how juries respond to that evidence, and whether it adds weight to the case for judge-only trials in complex fraud cases, a proposal that remains in the Courts and Tribunals Bill as it returns to Parliament,” she added.
The government already had to do a slight u-turn on its plans to scrap jury trials in the criminal courts as a result of a serious backlog in the justice system.
Kingsley Napley partner Alun Milford, added: “This may well not be as controversial as the proposal to abolish jury trials for fraud cases and, if at the end of the consultation exercise the government decides to progress the incentive idea, its huge majority should allow it to do so… “If that is the way it chooses to go, our concern will be about fair trial safeguards.”
Risks to business culture
Lawyers also pointed out the risk this scheme could have to corporate culture and internal governance.
Mackie, an employment lawyer, explained it will directly “undermine internal corporate governance.”
“It is never helpful to have to question the motives of someone reporting an alleged crime, which will always be a risk, and so paying people to do so is fundamentally flawed,” she added.
Gena Ritchie, lawyer at VWV, said whistleblowing plays an important role in tackling fraud, but added that if the scheme doesn’t run alongside proactive internal fraud prevention, it risks creating deep “distrust within an organisation”.
“It is however important to ensure that any scheme introduced in the UK complements, rather than replaces, proactive fraud prevention measures,” she added.
The move on Monday by the government follows the SFO putting out its job spec for its next SFO director last week, seven months after Ephgrave stepped down from the leadership position halfway through his term. “The SFO has been in limbo since his departure, with a caretaker director in place pending a new appointment. Ephgrave must be pleased to see this news, notwithstanding that it is only a consultation at present,” Hargreaves added.