The UK Government's consultation paper on whistleblowing ("the Consultation") signals a willingness to give effect to longstanding calls by the Serious Fraud Office ("SFO") for financial rewards to be paid to whistleblowers, and invites views on what arrangements could look like in practice.

The Consultation also sets out proposed reforms to other aspects of UK employment law in relation to whistleblowing. For further details on those, please see our separate client briefing.

Whistleblower incentivisation: the story so far

Once regarded as unlikely to find favour in the UK, suggestions about providing financial rewards to whistleblowers who provide details of suspected economic crime are now gaining traction.

The case for reform has been advanced in particular by former SFO Director Nick Ephgrave who suggested that, without comparable incentives, UK authorities are placed at a disadvantage relative to overseas enforcement agencies. He pointed in particular to the risks of losing valuable intelligence (and in some cases, compelling evidence capable of accelerating investigations and prosecutions) to other jurisdictions.

As noted in the Consultation, the case for change has also been made by Jonathan Fisher KC, who was commissioned by the Home Office to conduct the Independent Review of Disclosure and Fraud Offences. The proposals now laid out in brief terms in the Consultation mirror some aspects of his recommendations.

Alongside these developments, HM Revenue & Customs ("HMRC") has already strengthened its approach to rewarding informants who provide information leading to the recovery of tax revenues. For more details of how this forerunner scheme operates, see our previous blog post.

The proposed whistleblower rewards regime

The Government proposes a financial incentives scheme under which individuals who provide information leading to successful SFO enforcement action for economic crime could receive a monetary reward.

The proposal is deliberately broad in scope. Eligibility would not be limited to UK-based whistleblowers or information originating in the UK, and the Consultation seeks views on whether those involved in wrongdoing should be excluded from participation.

Importantly, the Government has not settled on a final model. Instead, it seeks views on a range of fundamental design questions, including who should determine eligibility and the level of any award, whether those decisions should be taken by the SFO or an independent body, how the scheme should be funded, and what safeguards should be introduced to deter speculative or low-quality reports while preserving incentives for individuals with genuinely valuable information to come forward.

Key questions

The Consultation focuses principally on the architecture of a whistleblower incentivisation scheme. For many organisations, however, the more significant questions concern how such a regime might affect whistleblower behaviour, internal investigations and corporate decision-making in practice. These are some of the issues that firms will wish to consider when participating in conversations to shape any scheme brought forward.

1. Which features of other whistleblower incentivisation schemes could inform an SFO whistleblower incentivisation scheme?
   
   The Consultation draws principally on US and Canadian experience, particularly the US Securities and Exchange Commission ("SEC") programme (of which, it notes, UK nationals are its second-largest overseas user group).
   
   The Consultation observes that whistleblower reward schemes commonly link awards to a percentage of funds recovered, often within a range of 10 per cent to 30 per cent, although some jurisdictions adopt different approaches, such as the Ontario Securities Commission's CAD$5 million maximum award.
   
   The proposed UK model would involve percentage-based rewards funded from corporate penalties. The possibility of sharing awards between multiple whistleblowers has been left open. The Consultation does not stipulate an upper limit on the amount that could be recovered by individuals (although it notes that the maximum amount that individuals may receive under HMRC's Strengthened Rewards Scheme is 30 per cent of the tax collected, excluding penalties and interest). In common with the existing US, Canadian and HMRC schemes, payments would be made to whistleblowers following demonstrable enforcement outcomes such as convictions or deferred prosecution agreements, rather than simply for reporting information to authorities. The Consultation proposes that any scheme that may be adopted by the SFO would follow a similar model, and would require information provided to be "significant and original".
   
   The Consultation is silent on whether an award would be reduced by compensation received through an employment claim or settlement (as are the published criteria for HMRC's Strengthened Rewards Scheme, the US SEC programme and Ontario's scheme).
   
2. What about authorities other than the SFO?
   
   The Consultation is focused exclusively on a whistleblower reward scheme operated by the SFO. It does not currently propose equivalent regimes for other UK enforcement agencies. However, it recognises that economic crime allegations are often reported through multiple channels. More broadly, while the Consultation is limited to the SFO, the outcome may be closely watched by other authorities. If a rewards scheme is perceived to improve intelligence gathering and enforcement outcomes, questions may arise as to whether similar approaches should be adopted elsewhere in the UK enforcement landscape.
3.  Who might be an eligible whistleblower?
   
   One of the most notable features of the proposed regime is that eligibility would not be tied to the UK's existing whistleblowing framework or the concept of a "protected disclosure" under the Employment Rights Act 1996. This means that it would not be limited to workers or employees and could potentially extend to a much wider range of individuals, including those based outside the UK.
   
   By drawing the scope of the regime broadly, the Government has placed emphasis on the value of information provided to the SFO, rather than the employment status of the individual providing it. This could have important practical consequences. For example, companies may need to revisit whether or how non-executive directors ("NEDs") fit into whistleblowing frameworks. NEDs often have substantial access to information about potential misconduct, but their access to these frameworks has historically been less straightforward than that of employees. More broadly, the proposal could bring within scope a wider range of individuals who are not workers for employment law purposes, including certain contractors, consultants, platform or gig-economy participants.
4. What safeguards does the Consultation propose for whistleblowers and the integrity of the scheme?
   
   Beyond the architecture of the reward scheme itself, the Consultation takes forward several of Jonathan Fisher KC's recommendations aimed at protecting the integrity of the regime and those who use it. It seeks views on whether to create a new criminal offence for individuals who knowingly make false reports to the SFO under the scheme (with no offence committed if the individual did not know or suspect the information to be false), and a separate offence targeting those who harass or intimidate whistleblowers who report under the scheme. It also seeks views on establishing an independent arbitration panel to consider complaints and appeals from whistleblowers about the scheme's operation, and on whether the SFO should be required to publish an annual report to support transparency and accountability.
5.  How might a whistleblower incentivisation scheme interact with regulatory requirements?
   
   Specific sectoral regulations impose various reporting obligations on particular categories of individuals. In financial services, for example, senior individuals may be subject to obligations requiring open and cooperative engagement with regulators, including under the Financial Conduct Authority ("FCA") and Prudential Regulation Authority ("PRA") supervisory frameworks. Anti-money laundering, sanctions compliance, health and safety, environmental and safeguarding legislation and regulatory requirements likewise impose obligations to bring certain matters proactively to the attention of authorities. The Consultation seeks views on whether individuals who are already under a legal duty to disclose information should be eligible for a reward, but does not explore in detail how such duties may interact with a whistleblower incentivisation regime.
   
   It also seeks views on whether compliance with a company's internal reporting procedures should be taken into account when determining the amount of any reward. These questions reflect a broader tension between incentivising external reporting and preserving the effectiveness of existing governance and compliance arrangements.
   
   For corporates, the significance of the proposals may therefore lie less in the creation of a new reporting route than in the renewed focus on the quality of internal whistleblowing systems. Across many sectors, regulators increasingly expect firms to maintain effective speak-up arrangements, ensure concerns are escalated appropriately, protect those who raise concerns from retaliation, and investigate allegations promptly and independently. If financial incentives increase the likelihood of external reporting, organisations may come under greater pressure to demonstrate that their internal arrangements are capable of identifying, assessing and escalating serious concerns before they become matters for law enforcement or regulatory intervention.
6. How might the proposals affect decisions for corporates about whether to self-report suspected misconduct?
   
   In recent years, the SFO has repeatedly emphasised the importance of prompt self-reporting, genuine cooperation and effective compliance programmes when assessing how to resolve corporate wrongdoing. A company that identifies misconduct early, conducts a credible internal investigation, preserves evidence, remediates failings and engages constructively with the SFO is generally likely to be better placed to argue for a more favourable outcome than one which does not. For further details of the latest revisions to the SFO's guidance on cooperation, see our separate blog post.
   
   A whistleblower rewards regime could compress the time available for organisations to identify and escalate potential misconduct before it comes to the attention of the authorities. There may be a greater risk that individuals with access to significant information may choose to approach the SFO at an earlier stage, particularly where they perceive a possibility of financial reward. This may place greater emphasis on effective speak-up arrangements, rapid triage of allegations raising potential economic crime concerns, and clear escalation procedures capable of supporting timely decisions on investigation, remediation and, where appropriate, self-reporting. In practice, one of the scheme's most significant effects may be to increase the value of early detection and reinforce existing SFO expectations regarding corporate cooperation and compliance.

What happens next?

The Consultation closes on 8 January 2027, after which the Government will consider responses and publish a formal response setting out next steps during 2027.