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 recent ruling by the European Court of Human Rights (ECtHR) Grand Chamber in the case of Halet v. Luxembourg signifies a win for whistleblower rights and freedom of expression. This decision concludes a decade-long legal struggle for Raphael Halet, overturning prior judgments by the Luxembourg Court of Appeal and the ECtHR’s Third Chamber. The court affirmed that whistleblowers revealing information in the public interest should receive protection under Article 10 of the European Convention on Human Rights (ECHR). Mr. Halet’s case, which involved tax matters considered to be of public concern, did not involve reporting illegal activities. Instead, he exposed information about the functioning of public entities within a democratic society, igniting public discourse and raising questions about potential harm to public interest. This context led the Court to make a significant statement by ruling in his favor.

The core issue for the court was determining whether Mr. Halet’s criminal conviction for sharing sixteen documents from his employer with a journalist constituted a disproportionate infringement on his freedom of expression. The Luxembourg Court of Appeal had previously determined that the harm Mr. Halet caused to his employer, PricewaterhouseCoopers (PwC), outweighed the public interest in the disclosed information. This stance was upheld by the ECtHR’s Third Chamber. In revisiting this decision, the Grand Chamber referred to established case law and the “Guja criteria,” which encompass: the disclosure channel, public interest, information authenticity, good faith, damage to the employer weighed against public interest, and the sanction’s severity. While all six criteria were examined, the focus remained on the damage to PwC and the sanction’s severity.

The court emphasized that the criteria should be evaluated collectively, without a rigid hierarchy. When assessing the balance between public interest and any detrimental effects from the disclosure, the court, contrary to the Luxembourg government’s argument, did not view it as a conflict of rights. Instead, it examined whether domestic courts struck a fair balance between the public interest in the documents and the overall harm resulting from their disclosure. The Grand Chamber rejected the Luxembourg Court’s requirement for disclosed information to be “essential, new, and previously unknown,” recognizing that public debate is ongoing and new information can surface. The ongoing debate in Luxembourg surrounding tax practices did not diminish the relevance of the disclosed documents. In fact, the judgment dedicated considerable attention to the significance of transparency in taxation, particularly given the prevalence of tax avoidance and optimization strategies. The Court underscored that repeated attention on an issue might be necessary to mobilize public authorities and society at large.

In contrast to previous rulings, the Grand Chamber adopted a different perspective on balancing employer harm with the public’s right to know. While acknowledging the negative impact of the disclosures on PwC, the court found that the Luxembourg Court of Appeal failed to adequately justify why PwC’s damage outweighed the public interest. The Grand Chamber criticized the lower court’s vague references to “damage to … image” and “loss of confidence,” without detailed substantiation. Despite a challenging period following the LuxLeaks investigations, PwC’s revenues rebounded quickly, and its operations expanded. The Grand Chamber concluded that the domestic courts, in their balancing act, applied an overly narrow interpretation of the public interest inherent in the revealed information. They also focused solely on the damage incurred by PwC, disregarding potential harm to PwC clients and the broader public interest in preventing theft, upholding professional confidentiality, and ensuring accountability. As a result, the Grand Chamber determined that the Luxembourg Court of Appeal erred in its assessment of this criterion.

Further scrutiny was given to the sixth criterion: the sanction’s severity. The Grand Chamber highlighted the vital role whistleblowers play in society, emphasizing that excessive restrictions could deter potential whistleblowers from coming forward. Regarding Mr. Halet’s criminal conviction, the court deemed it disproportionate to the intended objective and stated that Luxembourg’s interference with his right to free expression was not “necessary in a democratic society.” Mr. Halet was awarded €15,000 for non-pecuniary damages and €40,000 for legal costs. However, given the decade-long legal battle and its impact on his career and professional standing, it remains to be seen if this compensation adequately addresses the full extent of his losses. This case highlights the financial and professional repercussions whistleblowers often face, prompting a call for more effective compensation mechanisms in the future.

The dissenting opinion from four judges merits attention as well. They critiqued the Grand Chamber’s interpretation of public interest, the significance of protecting professional confidentiality, the balancing process, and the sanction’s severity. Notably, they characterized Mr. Antoine Deltour, another individual involved in the LuxLeaks case, as acting in bad faith by stealing documents. This characterization is unexpected given that Mr. Deltour was not found to have acted in bad faith and his actions were legally justified due to his status as a whistleblower. The dissenting judges’ reasoning reflects a somewhat outdated understanding of whistleblowing, questioning its compatibility with professional confidentiality and its relationship to criminal law. Their viewpoint underscores a crucial aspect of whistleblowing: it often involves bringing to light activities that, while not illegal in themselves, raise significant ethical concerns and warrant public debate. This function is essential for fostering transparency, accountability, and public awareness of potential wrongdoing. However, it is paramount that whistleblowing activities are conducted proportionately and in good faith.

Ultimately, the Grand Chamber’s judgment resonates as a victory for those who have faced retaliation, blacklisting, and demotion for exposing wrongdoing. The court’s message is clear: whistleblowers should be empowered, not silenced. As emphasized in the judgment, the goal of whistleblowing is not merely to reveal information of public concern but to catalyze positive change by prompting remedial action from responsible public authorities or private entities. This echoes the vision of Ralph Nader, who coined the term “whistleblowing” in the 1960s, envisioning it as a mechanism for alerting, informing, reforming, and ultimately safeguarding democratic societies.