Rewarding whistleblowers should not be seen as bounty hunting

For many years I have argued (Opinion: Why compensating UK whistleblowers would be a positive step) that the UK must financially recompense whistleblowers who expose serious fraud, bribery, corruption, and money laundering.

This position has sometimes been treated as controversial, even distasteful, by those who dislike the idea of “paying for information”. However, I was pleased to see that Jonathan Fisher KC’s independent review, Fraud in the Digital Age, supports this notion.

Fisher is one of the country’s leading fraud barristers. He has recommended that Parliament should legislate to allow the Serious Fraud Office (SFO) to financially reward whistleblowers. His conclusion follows sustained advocacy by former SFO Director Nick Ephgrave, who repeatedly argued that the absence of a reward mechanism represented a missed opportunity for British law enforcement.

In his first public speech after assuming his role in 2024, Ephgrave said: “I think we should pay whistleblowers. If you look at the example of the United States of America, their system allows that, and I think 86% of the $2.2 billion in civil settlements and judgments recovered by the US Department of Justice were based on whistleblower information.”

I believe that the debate is shifting. The question is no longer whether whistleblowers should be recompensed, but how a credible scheme could be constructed.

Whistleblower risks

Opponents of rewards often assume that a whistleblower can report wrongdoing, receive a pat on the back and continue their career unaffected. This is (wildly) unrealistic. Whistleblowers rarely emerge unscathed. They risk isolation, stalled promotion, reputational damage, dismissal and exclusion from future employment within their industry or sector.

There is legislation (see Whistleblowing for employees) providing some protection to shield employees from detriment or dismissal for making protected disclosures. However, protections do not restore a damaged reputation, replace lost earnings, or eliminate the psychological and financial burden of litigation.

I prefer the term recompense rather than incentive. A financial award is not simply a bounty to encourage allegations: it compensates individuals who accept personal and professional risk to expose criminality.

Fisher recommends that the government should legislate to permit the SFO to reward whistleblowers and then consult on the design of a scheme. Any consultation process must ensure trained “informant handlers” from law enforcement are included, to share their invaluable experience and knowledge.

Key benefits

Fisher identifies three key benefits.

1. British whistleblowers are already taking valuable intelligence to American agencies. Ephgrave noted that more than 700 individuals from the UK had approached US authorities since 2012.
2. Insiders can dramatically accelerate investigations. Ephgrave told Parliament that knowledgeable individuals can identify participants, explain methods, and direct investigators to relevant evidence. Anyone experienced in fraud investigations understands this advantage. Information does not replace investigation, it provides direction.
3. Rewards may improve corporate behavior. If employees can bypass ineffective internal processes and report directly to the SFO, companies have stronger incentives to investigate properly and self-report misconduct.

Fisher suggests that a well-designed scheme could encourage earlier disclosures and increase Deferred Prosecution Agreements (DPAs). Earlier detection and preservation of evidence are clear benefits; however, DPAs must not become a means of shielding culpable individuals (I have my own thoughts – Is deferred prosecution the right way forward for the SFO? – regarding DPAs in the context of the SFO).

US system

Critics often portray the US whistleblowing systems as driven by speculative complaints and excessive payouts, overlooking strict evidential thresholds. The US SEC rewards individuals who provide original, high-quality information leading to enforcement actions exceeding $1m, ranging from 10% to 30% of recovered sums.

In 2024, the SEC awarded over $255m to 47 whistleblowers. Fisher’s review also notes that the Commodity Futures Trading Commission has paid approximately $390m in rewards, linked to recoveries exceeding $3.2 billion.

These figures are striking, but the key point is effectiveness. These systems have generated actionable intelligence, successful enforcement, and substantial recoveries. The US Department of Justice has also introduced a corporate whistleblower pilot programme, offering a share of forfeited assets where information leads to recovery.

Britain already accepts the principle of whistleblowing in limitedcontexts. HMRC has discretion to reward informants and paid approximately £852,000 ($1.1m) in 2024-25, following a record number of reports. Its Strengthened Reward Scheme pays individuals 15% to 30% of the unpaid tax recovered when their intelligence leads to the collection of at least £1.5m ($2m) in serious tax avoidance or evasion.

Therefore, the notion that financial rewards are incompatible with British justice is simply not true.

Safeguards

The principal objection is that rewards may encourage false or malicious reports. That risk exists, but it can be managed. Fisher proposes several safeguards, several of which I have previously suggested:

• A criminal offence for knowingly submitting false reports.
• A criminal offence for harassing or intimidating whistleblowers.
• Formal agreements governing eligibility and payment.
• Annual reporting on rewards.
• An independent arbitration panel.

Operational safeguards are equally important. Information must be assessed by specialist investigators and tested against documentary evidence, financial records and independent witnesses. Payment should depend on accuracy, originality and value – not merely the act of reporting.

A reward must never transform an uncorroborated allegation into evidence. Where whistleblowers testify, potential payments must be disclosed and carefully managed. Courts already assess witnesses who receive benefits such as immunity or reduced sentences. The issue is credibility, not admissibility.

Fisher’s report proposes broader reforms. It recommends increasing maximum sentences for serious fraud and money laundering to 20 years, reflecting the scale of harm caused.

It also addresses technology platforms, information sharing, international cooperation and modernization of disclosure processes. The review estimates annual fraud losses at approximately £2.3 billion ($3.1 billion), while acknowledging that the true figure is likely higher. Much offending occurs online and across borders, exploiting weaknesses in traditional policing.

The government’s commitment to greater use of artificial intelligence in processing digital evidence is also welcome. Modern investigations cannot rely solely on manual review of vast datasets. Technology can assist in identifying patterns and relevant material, provided it remains subject to human oversight and proper scrutiny.

The sharpest tool in the box

Whistleblowing remains one of the most effective tools in combating fraud, corruption and money laundering.

For too long, we’ve expected whistleblowers to sacrifice career and livelihood purely in the public interest, while organizations retain far greater resources.

Fisher’s review and Ephgrave’s advocacy highlight the shortcomings of that approach. Rewarding whistleblowers is not radical, it is an existing and practical law enforcement measure supported by international experience.

After years of hesitation, the direction is clear. The question is whether ministers will implement these recommendations or miss another opportunity to strengthen the fight against economic crime.

This article originally appeared on GRIP.