ARTICLE 19 welcomes the decision of the Grand Chamber of the European Court of Human Rights (European Court) in Halet v. Luxembourg concerning protection of whistleblowers. Known as ‘LuxLeaks’, the case concerned two employees of PriceWaterhouseCooper who leaked information about international tax avoidance schemes to journalists. The decision represents an important step in a stronger protection of whistleblowers in Europe.
The case was brought to the European Court by Mr Halet, ex-employee of an international firm PricewaterhouseCoopers (PwC), who leaked confidential documents, protected by professional secrecy, to the media. The documents showed that hundreds of multinational companies had constructed complex strategies to reduce their tax bills to near zero. Following a complaint by PwC, and at the close of criminal proceedings against him, Mr Halet was ordered by the domestic courts in Luxembourg to pay a criminal fine of 1,000 euros, and to pay a symbolic sum of 1 euro in compensation for the non-pecuniary damage sustained by his employer.
Overturning a previous decision by the Third Chamber, the Grand Chamber of the European Court has found that the disclosure of information contributed to the public debate, at both national and European level, around tax practices of multinational companies. Hence, there was a public interest in the disclosure.
First of all, the Grand Chamber found the leaked information was in the public interest. It ruled that the information was not only ‘alarming or scandalous’ but had also provided fresh insight into 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 at European level and, in particular, in France. As such, this information had undoubtedly contributed to the ongoing debate on tax evasion, transparency, fairness and tax justice.
Importantly, the Grand Chamber also established that the damage suffered by PwC from the revelations could not be the only factor to consider when assessing the ‘detrimental effect of the disclosure’. Although PwC had suffered some financial and reputational damage following the disclosure, this could not outweigh the public interest in the disclosure.
Last but not least, the Grand Chamber found that the penalties imposed on Halet for his actions were disproportionate and their cumulative effect ‘had a chilling effect on the freedom of expression, both in the present case and beyond.’ The potential chilling effect of the prosecution had been completely disregarded by national authorities.
ARTICLE 19 particularly welcomes that the Grand Chamber of the European Court ruled that the direct use of the media as an external reporting channel is part of the right to impart information of public interest. This right also encompasses the disclosure of information to the media that relates to the employer’s normal activities that were not in themselves illegal.
At the same time, ARTICLE 19 regrets that in the assessment of the case, the Grand Chamber has not departed from the so-called ‘Guja principles’. The principles, developed in 2008, are used to assess whether the protection of the right to freedom of expression in Article 10 of the Convention protects disclosure of confidential information obtained in the context of an employment relationship. At the same time, the European Court recognised that European and international law have moved towards a stronger recognition of the role of whistleblowers in democratic societies, most notably the EU Directive on the Protection of Whistleblowers, and therefore, it considered it necessary to ‘fine-tune the application of such criteria’ in the present case.