The Grand Chamber of the European Court of Human Rights refined the Guja criteria and reaffirmed the crucial character of the special protection of whistle-blowers under their right to freedom of expression and information in our democratic society (Case no 21884/18).
Background to the case
This case concerned the leak of confidential tax related documents by a former employee of PwC, M. Halet, which led to the so-called LuxLeaks Scandal. After a first disclosure made by his colleague, M. Halet delivered to the media 14 tax returns and 2 accompanying letters, confidential documents obtained from his workplace. Those disclosures revealed highly advantageous tax agreements between multinational companies and the Luxembourg tax authorities. Following the disclosures, M. Halet was dismissed by his employer and additionally convicted by the national courts of Luxembourg for the offences of theft and of breach of professional secrecy to pay a criminal fine of 1.000 euros and a symbolic sum of 1 euro in compensation for moral damage caused to his former employer.
After exhaustion of national remedies, M. Halet lodged a complaint against Luxembourg before the European Court of Human Rights (the “ECtHR”) in Strasbourg claiming that his criminal conviction constituted an interference with Article 10 of the European Convention on Human Rights (the “ECHR”) providing for the right to freedom of expression and information. On 11 May 2021, the third section chamber of the ECtHR rejected M. Halet’s arguments founding no violation of its whistle-blower’s rights. Upon request of M. Halet, the case was reviewed by the Grand Chamber of the ECtHR composed of 17 judges.
In the analysed judgment of 14 February 2023, adopted by 12 votes to 5, the ECtHR found that the interference at issue was prescribed by law and pursued a legitimate aim. The main question was: is the interference with the exercise of his right to freedom of expression (i.e. its criminal sanction) really “necessary in a democratic society”?
The applicant qualifies as a “whistle-blower”
The ECtHR clarified that the protection of the right to freedom of expression of “whistle-blowers”, i.e. mainly “civil servants or employees who, in breach of the rules applicable to them, disclose confidential information obtained in the workplace”, requires a special protection.
The Court reiterates that the protection enjoyed by whistle-blowers under Article 10 of the ECHR is based on the need to take account of characteristics specific to the existence of a work-based relationship: on the one hand, the duty of loyalty and discretion inherent in the subordinate relationship entailed by it; on the other, the position of economic vulnerability vis-à-vis the company and the risk of suffering retaliation from the latter.
Despite its refusal to precisely define the notion of “whistle-blower”, the ECtHR confirmed that, considering the specific context of the case, namely the fact that M. Halet, while employed by a private company, disclosed documents protected by professional secrecy obtained from his workplace, the applicant could qualify as a “whistle-blower”.
Freedom of expression prevails over the private interests at stake: the protection of a company’s reputation and professional secrecy
The special protection of whistle-blowers only takes shape through a number of criteria, the so-called “Guja criteria” established in the 2008 ECtHR judgment Guja v. Moldova (Case no. 14277/04). These criteria allow to assess whether and to what extent an individual disclosing confidential information obtained from his workplace could rely on the protection of Article 10 of the ECHR.
The ECtHR applied the six Guja criteria to the case at stake, refined in the light of the current European and international context and the place now occupied by whistle-blowers in democratic societies:
(1) Were alternative reporting channels available to make the disclosure?
Even if priority should in principle be given to internal reporting channels to raise an alert, the ECtHR recognised that the specific circumstances of the case can justify the direct use of external reporting channels. Noting that the tax-optimisation practices disclosed were legal, the Court considered that nothing would have justified an attempt by M. Halet to first alert his hierarchy in order to put an end to activities constituting his employer’s normal activity.
(2) Is the disclosed information authentic?
The ECtHR confirmed the accuracy and authenticity of the tax returns and covering letters disclosed by the applicant to the media.
(3) Did the whistle-blower act in good faith?
The ECtHR noted that the applicant met the good-faith requirement since it did not act for profit or in order to harm his employer at the time of making the disclosures.
(4) Does the disclosed information concern the public interest?
The ECtHR held that the documents disclosed by the applicant relating to the tax practices of some multinational companies undoubtedly contributed to the ongoing public debate on tax evasion, transparency, fairness and tax justice taking place at European level.
(5) Which detrimental effects have been caused by the disclosure?
The public interest must also be weighed up against all the detrimental effects of the impugned disclosure. If the Court recognised that PwC sustained some reputational damage, it noted that no longer-term damage had been established. It also recognised that the disclosures could have been prejudicial to the private interests and reputations of the multinational companies concerned.
In the light of the importance of the European and international public debate on the tax practices of multinational companies, to which the information disclosed by M. Halet has made an essential contribution, the ECtHR considered that the public interest in the disclosure of that information outweighed all of the detrimental effects.
(6) What is the severity of the sanction imposed on the whistle-blowers?
Lastly, the Court assessed the severity of the penalty imposed on M. Halet. Despite the minor character of its criminal conviction, the ECtHR underlined that the mere fact that the applicant was prosecuted and sentenced at the end of criminal proceedings which attracted considerable media attention constituted an undue restriction on freedom of expression. This entails a risk of obstructing or paralysing any future revelation by dissuading whistle-blowers from reporting unlawful or questionable conduct.
In light of the above considerations, and regarding the risk of chilling effect on any whistle-blower, the criminal conviction was considered as clearly disproportionate. The ECtHR concluded that there had been a violation of Article 10 of the ECHR.
For further information about this case and/or for general legal advice relating to Fundamental Rights, please contact Pierre de Bandt and Marion Nuytten.