FCA struggles with rising whistleblower caseload
The City has seen a jump in whistleblowing alongside a slowdown in the number of cases being closed in signs the UK’s financial watchdog is struggling to handle the caseload.
The volume of whistleblowing reports rose by nearly 30 per cent in the UK in the first three months of the year to hit a fresh high of 355, according to new data from the Financial Conduct Authority (FCA), but fewer reports have been closed.
In June the watchdog committed to take action faster in responding to close whistleblowing reports following a surge in numbers during its previous financial year.
However, the new data shows the regulator struggled to close as many reports as it did during the last quarter.
The FCA said it assesses every whistleblowing report that falls within its remit to “inform our work and help us identify actual or potential harm” which includes “harm to consumers, to markets, to the UK economy or to wider society.”
The rise in reports follows the regulator in October sharing that it had “made several improvements” to the whistleblowing process including handling the volume after receiving “more whistleblowing reports than ever.”
“We will continue to build on these improvements to be a smarter regulator,” FCA whistleblowing manager Linsday Nicholls said.
Whistleblowing laws ‘hopelessly out of date’
Devonshire’s partner Pauline Lépissier told CityAM it’s “hard to establish exactly” why there has been an increase in whistleblowing.
“On a basic level, it could simply be that there has been an increase in behaviour that requires reporting. Equally, it could also be a reflection of the fact that whistleblowing has become far more mainstream, with various high-profile reports meaning that individuals are far better acquainted with the procedure,” Lépissier said.
The FCA in its yearly report in June said there is growing discussion about offering whistleblowers financial incentives, but Lépissier said greater legal protection “is also needed.”
“The UK’s whistleblowing laws are hopelessly out of date, with the only recourse for whistleblowers being a claim in an employment tribunal. Unless we introduce tougher protections, including criminal sanctions for those who act unlawfully against whistleblowers, it won’t be a surprise if some individuals prefer the safety of silence,” she said.