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The grand chamber of the European Court of Human Rights recently ruled in favor of a whistleblower who worked for the multinational accounting conglomerate PricewaterhouseCoopers (PwC) and exposed tax evasion schemes in Luxembourg.
French national Raphaël Halet, a former auditor for PwC, alleged that his criminal conviction had disproportionately interfered with his right to freedom of expression and challenged a fine of 1,000 euros that was levied against him.
On February 14, 2023, the grand chamber overturned a prior decision by the lower chamber and determined that the fine, which interfered with Halet’s “freedom to impart information,” was not justified.
In 2012, Halet shared 16 documents with journalist Edouard Perrin—“fourteen tax returns and two [cover] letters.” They were also referenced in a 2013 television program, “Cash Investigation."
The International Consortium of Investigative Journalists (ICIJ) later collaborated with Perrin, posting the documents as part of their Luxembourg Leaks project (or LuxLeaks).
LuxLeaks brought attention to Deutsche Bank, Pepsi, IKEA, AIG, Abbott Laboratories, and more than 300 other companies that had secret deals in Luxembourg to help them “slash their global tax bills.”
As the grand chamber recalled, PwC fired Halet then he was prosecuted and sentenced after criminal proceedings that “attracted considerable media attention. The court considered the “chilling effect” on Halet or other whistleblowers that was created by prosecuting and imposing a fine.
“The applicant’s criminal conviction cannot be regarded as proportionate in the light of the legitimate aim pursued,” the court stated.
Article 10 in the European Convention on Human Rights is supposed to protect a person’s right to freedom of expression. It is routinely invoked by whistleblowers who have had their rights violated. Yet there are certain circumstances where interference may be acceptable.
Judges in the grand chamber considered the following:
- whether or not alternative channels for the disclosure were available;
- the public interest in the disclosed information;
- the authenticity of the disclosed information;
- the detriment to the employer;
- whether the whistleblower acted in good faith;
- the severity of the sanction
In fact, the lower chamber had found “that informing the public through the media had, on this occasion, been the only realistic alternative” for Halet to disclose the information.
There was no evidence to indicate that Halet had acted “for profit or in order to harm his employer."
The fact that a debate had already been ongoing on tax evasion or that the information may not have necessarily been new to the public did not undermine Halet's case.
Halet, the grand chamber stated, “provided fresh insight, the importance of which should not be minimized in the context of a debate on ‘tax avoidance, tax exemption and tax evasion,’ by making available information about the amount of profits declared by the multinational companies in question, the political choices made in Luxembourg with regard to corporate taxation, and their implications in terms of tax fairness and justice” in Europe and particularly France.
The grand chamber weighed the fact that the information was stolen and that Halet had breached “professional secrecy” to reveal the documents. But a majority of judges believed that the importance of “a public debate on the tax practices of multinational companies” outweighed any negative effects that may have occurred as a result of Halet’s theft of documents.
Media Defence, an organization based in the United Kingdom, had urged the grand chamber to reconsider the prior ruling that upheld the fine against Halet. They contended that the case could have a “significant impact on how how investigative journalism was conducted, particularly in a context in which journalistic sources were coming under increasing pressure” in Europe.
The press freedom organization emphasized that whistleblowers play an “important role as journalistic sources by disclosing important information on a range of matters relating to the public interest. Any reduction in the level of protection available to them would, by extension, impact on the ability of the press to do its job.”
“Media Defence pointed out that numerous cases of corruption and malfeasance had come to light in recent years because of whistleblowers and referred to the disclosures of information concerning Facebook and Boeing, and to the Panama Papers," the grand chamber further summarized. "The inability of the press to obtain information from private entities reinforced, in its view, the importance of the information that whistleblowers were likely to communicate."
Halet was awarded 15,000 euros in damages and 40,000 euros for costs and expenses that stemmed from pursuing the litigation.
Billions of dollars in tax dodging was exposed by Halet and others, who contributed to LuxLeaks. ICIJ recalled, “European governments promised to end the culture of secrecy that allowed some of the world’s largest companies to pay less than 1% tax.”
However, in Luxembourg, Halet, Perrin, and another whistleblower named Antoine Deltour were criminally prosecuted for their role in releasing documents that fueled a public debate. Perrin and Deltour were later acquitted.