How game theory can help us design more effective whistleblowing polices for sports (Part 2)

Published 02 October 2019 By: Louis Weston, Sarah Crowther QC

Whistleblower Law

This two part article considers how sports bodies can design more effective whistleblowing polices.

Part 1 (available here) examined three interesting scenarios from the behavioural field of game theory to help give us a better understanding of how decisions are made in difficult circumstances, analogous to those a potential Whistleblower may face. It then identified ways in which the ‘rules of the game’ might be changed to better incentivise a certain behavioural outcome.

Part 2 (below) builds on the theory from Part 1. It first examines the current state of Whistleblowing laws in England & Wales to ascertain the current ‘lay of the land’ and the lessons we may learn from within the law. It then combines this with the game theoretical learning from Part 1 to examine why Whistleblowing policies are necessary and how they might be best drafted to optimise effective reporting.

Current legal protections for Whistleblowers in England & Wales – and the lessons we can learn

Before we start looking at the key points to consider when drafting a whistleblowing policy it is worth taking a quick look at the legal protection already provided by law in the England & Wales. That is a relatively short process because the current legal protections for Whistleblowers are limited.

The limited protections exist within employment rights law and were originally introduced following various financial scandals and health and safety accidents, where subsequent investigations showed that prevention could have taken place if only employees had been enabled to voice concerns1.

Section 1 of the Act inserted Sections 43A to L into the Employment Rights Act 1996 under the heading, ‘Protected Disclosures’ and made a Whistleblower a ‘protected characteristic’. The whistle could therefore be blown where there was a ‘reasonable belief’ that a criminal offence, failure to comply with legal obligations, miscarriage of justice, danger to health and safety of employees, damage to the environments or withholding of information which would tend to show any of the above.

The Enterprise and Regulatory Reform Act 2013 introduced a series of changes to Public Interest Disclosure Act’ 1998 (PIDA) and now protected disclosures have to be shown to be ‘in the public interest’. This was in response to complaint by employers that it was often difficult to distinguish between a personal grievance and an issue of wider public interest.

There is nothing in the legislation which requires an employer to have a whistleblowing policy and, whilst many employers have now developed internal processes for reporting issues, a survey by whistleblowing charity Protect suggests that in 2015, 48% have policies regarding whistleblowing2.

Protection is provided under Section 43K PIDA to an extended category of persons described as ‘workers’. It means that they cannot be subjected to detriment or threat of detriment on the ground that they have made a protected disclosure. There is a causative presumption in the complainant’s favour, so that an employer must show that any detriment suffered by the employee is not on grounds of his protected disclosure.

PIDA was seen as ground-breaking at the time, not least because the UK was the first country in Europe to embrace the need for legislative protection against retaliation for whistle-blowers. However, the legislation is now seen in many quarters as in need of update. The EU published a Directive in April 2019, which (if implemented in the UK) would require broadening of the whistleblowing protection to include volunteers, non-executive directors, self-employed contractors and job applicants. It would require legal aid to be provided for Whistleblowers.

Criticisms from charity and pressure groups who work with and on behalf of whistle-blowers, include the following main issues:

  1. Protection focuses on those working in certain sectors. For example, disclosures are more likely to be in the public interest where an employer is a state organisation or contracts with the state. There is inherent uncertainty whether a disclosure will be seen as in the wider public interest and therefore attract protection;

  2. The protection is limited to workers. In particular, members of the public, users of a service and some independent contractors derive no protection;

  3. The protection is limited to retrospective claims which need to be litigated once retaliation has taken place – after harm has occurred and therefore requiring the whistle-blower to carry the risk that retaliation will take place.

The recent case of Jess Varnish and her allegations of discrimination and bullying against British Cycling coaches including the technical director, which failed on the basis that she lacked the mutuality of obligation of a wage-work bargain, as her status was ‘merely’ that of athlete training in the hope of selection and that despite the high degree of control exercised over her life, the contractual arrangements were not a contract for services provided by the athlete to the SGB, demonstrates the risk to whistle-blowers in sport of lack of protection3. Whilst this decision might be a correct analysis on the current law, the wider question as to whether this is the correct outcome for sport that athletes remain without protection, still remains.

There are further practical issues which also tend to increase the risk to whistle-blowers. PIDA generally requires disclosures to be made to the employer. This does nothing to address several risks inherent in whistle-blowing (i) that the disclosure is not acted upon or inadequately addressed (ii) that confidentiality is breached or (iii) that the employer will retaliate against the whistle-blower. For those who consider that it is not possible to make the disclosure to their employer, there is an additional complication that protection against retaliation can only be given if the disclosure is made to a specific list of regulators or other bodies, whose identities can be difficult to establish.

Employers and responding bodies also have issues with the manner in which PIDA operates. For public sector organisations, it is difficult to distinguish between personal employee grievances (which attract no protection) and disclosures in the wider public interest (which do). Further, there is no clear definition of whistle-blowing in the legislation which adds uncertainty to the ambit of protection. Finally, employers often suspect that ‘disclosures’ are made other than in good faith, but this is very difficult to establish and is not a defence.

On a practical level, it seems clear that PIDA has not been an effective driver of culture change. The Francis Inquiry report4 examined causes of failure of care at Mid Staffordshire NHS Foundation Trust between 2005 and 2009 and its key findings included that the right conditions still did not exist within the NHS for staff to speak up.

Attempt was made in the NHS following the Francis report to address some of these concerns. The report’s main recommendations included some which would put in place pro-active steps to encourage disclosures and promote a more favourable climate for making them. Central to this was the creation of the National Guardian which is supposed to provide support and guidance for those considering blowing the whistle or for those who have made disclosures.

Sadly, this initiative has not been universally felt to have been very successful. Similar measures adopted in the Financial Services Sector following the banking crisis also appear to have had limited success in changing the culture in organisations sufficiently to promote transparency and disclosures.

Another feature in the legal landscape which has been seen as detrimental to whistleblowing is the widespread use of confidentiality clauses/non-disclosure agreements or ‘NDAs’ in settlement of employment claims. These are frequently entered at the end of an employment relationship, especially where the employee has made allegations and the employer wishes (i) not to have to contest allegations, whether they are accepted or not and (ii) wants the employee to waive rights in exchange for the compromise.

On the face of things, such clauses are often drafted widely enough to prevent an employee from talking about wrongdoing. However, if a disclosure would be ‘protected’ within the meaning of PIDA, then even after signing a confidentiality agreement, the employee can still speak about the allegation in some circumstances. However, as discussed above, the limitations on what can be disclosed and to whom the disclosures can be made, increase the risks for the would-be whistle-blower5.

So why should a sports organisation or regulator take on additional voluntary responsibility not required by law?

Increasing pressure is being placed on Parliament to legislate to extend the remit of PIDA: see the All-Party Parliamentary Group working group report of June 20196. In that report, several charity and other groups are calling for creation of a whistleblowing champion or ombudsman with both a support role but additionally powers to bring claims against organisations who fail adequately to support whistle-blowers or protect them from retaliation.

Quite apart from the regulatory threat, there are positive reasons for adopting a clear structure for considering whistleblowing situations. It increases transparency and improves the culture of the organisation. It provides cogent evidence for the prosecution of offences/breaches: e.g. in fraud cases some 42% of prosecutions are said to depend upon the evidence of a Whistleblower. Furthermore, it assists those tasked with dealing with disclosures in how effectively to handle them. Finally, it assists those defending cases of detriment if the claimant has not followed a clear and well-publicised whistleblowing policy.

The World Anti-Doping Agency policy7 distinguishes between informants and whistle-blowers, the latter category being individuals who have entered a formal agreement with WADA. Whistleblowers are entitled to protection against retaliation and even financial rewards, the policy itself implicitly accepting that the objective of a zero-tolerance culture to doping and other forms of cheating cannot be achieved without support for individuals faced with the decision whether to become an informant or Whistleblower. Strikingly, the policy itself recommends that a would-be informant reads carefully the policy BEFORE making her decision on whether to disclose, whether under the policy or otherwise.

Key points for drafting an effective whistleblowing policy

Let us pull the strings together.

What we consider can be learnt from game theory, #MeToo and the current legal framework is that in order to achieve a useful, useable and effective Whistleblowing Policy an SGB must have a Whistleblowing strategy that addresses the following:

  1. Fundamentally any Whistleblowing policy must make clear that a report will be considered and will be considered seriously, promptly and in confidence.

  1. A definition of “public or sport’s interest disclosure” that defines what should be disclosed and guidance as to when the policy will apply. Some cases are obvious situations of Whistleblowing, such as disclosures of fraud or corruption, breach of doping or safeguarding rules. Others may not jump off the page in the same way, such as incidents with a health and safety angle or discrimination issues but the room for doubt should be limited and avoided by clear policy and room to discuss confidentially whether a report meets the criteria.

  1. Confidentiality of the Whistleblower. It is not compulsory to maintain the confidentiality of the whistle-blower as a matter of law, but we consider that it is inevitably good practice for a policy to take all reasonable steps to do so and at least up to the point where the decision to prosecute (and possibility of revelation of identity is made). Where protection of confidentiality is unrealistic, those considering blowing the whistle ought to be offered advice on risks that others will speculate as to the identity of the Whistleblower and that the information might be deduced from a jigsaw identification.

  1. Information about how a disclosure ought to be made. The clearer the policy, the easier it will be for those making a disclosure to do so. The policy needs to signpost what form the disclosure should take and to whom the disclosure should be made. It should provide clear alternative routes for the situations where the disclosure concerns the person to whom the disclosure should generally be made. Modern means of communication and interaction should be encouraged.

  1. Guidance to those to whom disclosure is made. It is often overlooked in a Whistleblowing policy to address the recipient of a disclosure with guidance as to what steps to take in response to a disclosure. What investigation needs to be made, what information should be provided to the Whistleblower during the course of the investigation and reporting on outcome, including where a decision is taken that no further action is warranted.

  1. Specific protections for the whistle-blower. Some suggestions from other policies include: external legal assistance for vindication of rights/compensation following retaliation; protection of identity, financial rewards or financial assistance/compensation for losses arising as a result of disclosure, protection against prosecution or plea-bargaining arrangements.

  1. The circumstances in which protection might be removed, including knowingly false disclosures of alleged misconduct and the sanctions to be applied.The policy must make clear that Whistleblowing depends on truth and cooperation that is mutual. A knowingly false complaint should receive sanction.

  1. Investigation processes to assist those who receive disclosures as to how to handle them effectively. An SGB must have the ability to limit the circulation of confidential information within its organisation and more specifically within that part of the organisation responsible for considering breaches of the Rules or other disclosures. Consideration should be given to third party organisations managing reporting of Whistleblowing for an SGB. A Whistleblower should be assigned a single point of contact available to discuss both the report and the consequences of it.

  1. Details of the rights and responsibilities of the SGB to the whistle-blower and vice versa. The policy must identify what use and in what circumstances use can be made of the information provided and when and in what circumstances information can not be used by either SGB or the Whistleblower.

  1. Allowing others to know of a Whistle having been blown. The policy should address the position of where two or more reports are made in confidence but separately. The policy should drive to a position that allows the minimum facts of one report to be known to the other reporter. The policy must in those circumstances be explicit and demand that the cross sharing of information is limited and recorded completely to avoid and to counter allegations of incitement or collaboration. The sharing should only ever take place once complete record of a complaint has been made and recorded, and only by consent.

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Author

Louis Weston

Louis Weston

Barrister, Outer Temple Chambers

Louis is a Barrister practising from chambers at Outer Temple. He is expert in corruption and misfeasance in sport.

Sarah Crowther QC

Sarah Crowther QC

Barrister, Outer Temple Chambers

Sarah Crowther QC has a broad practice with areas of focus in personal injury, private international law, clinical negligence and public law and discrimination cases.