Droits intellectuels, Droit et Technologie

Halet v. Luxembourg – The European Court of Human Rights strengthens whistle-blowers’ protection under their right to freedom of expression and to impart information

This case (21884/18) concerned the leak of confidential tax related documents by a former employee of PwC, M. Halet, which led to the so-called LuxLeaks Scandal. M. Halet delivered to the media 14 tax returns and 2 accompanying letters, confidential documents obtained from his workplace. Those disclosures revealed highly advantageous tax agreements between multinational companies and the Luxembourg tax authorities. Following the disclosures, M. Halet was dismissed by his employer and additionally convicted by the national courts of Luxembourg for the offences of theft and of breach of professional secrecy to pay a criminal fine of 1.000 euros and a symbolic sum of 1 euro in compensation for moral damage caused to his former employer.

After exhaustion of national remedies, M. Halet lodged a complaint against Luxembourg before the ECtHR claiming that his criminal conviction constituted an interference with Article 10 ECHR. On 11 May 2021, the third section chamber of the ECtHR rejected M. Halet’s arguments founding no violation of its whistle-blower’s rights. Upon request of M. Halet, the case was reviewed by the Grand Chamber of the ECtHR.

In the analysed judgment of 14 February 2023, adopted by 12 votes to 5, the ECtHR found that the interference at issue was prescribed by law and pursued a legitimate aim. The main question concerned the necessity of its criminal sanction in a democratic society.

The Court reiterates that the special protection enjoyed by whistle-blowers under Article 10 ECHR is based on the need to take account of characteristics specific to the existence of a work-based relationship: on the one hand

, the duty of loyalty and discretion inherent in the subordinate relationship entailed by it; on the other, the position of economic vulnerability vis-à-vis the company and the risk of suffering retaliation from the latter. The ECtHR confirmed that the applicant could qualify as a “whistle-blower”.

The special protection of whistle-blowers only takes shape through a number of criteria, the so-called “Guja criteria” established in the 2008 ECtHR judgment Guja v. Moldova (Case no. 14277/04). The ECtHR applied the six Guja criteria to the case at stake, refined in the light of the current European and international context and the place now occupied by whistle-blowers in democratic societies:

(1)    Were alternative reporting channels available to make the disclosure? Even if priority should in principle be given to internal reporting channels to raise an alert, the ECtHR recognised that the specific circumstances of the case can justify the direct use of external reporting channels. Noting that the tax-optimisation practices disclosed were legal in Luxembourg, the Court considered that nothing would have justified an attempt by M. Halet to first alert his hierarchy in order to put an end to activities constituting his employer’s normal activity.

(2)    Is the disclosed information authentic? The ECtHR confirmed the accuracy and authenticity of the tax returns and covering letters disclosed by the applicant to the media.

(3)    Did the whistle-blower act in good faith? The ECtHR noted that the applicant met the good-faith requirement since it did not act for profit or in order to harm his employer.

(4)    Does the disclosed information concern the public interest? The ECtHR held that the documents disclosed by the applicant undoubtedly contributed to the ongoing public debate on tax evasion, transparency, fairness and t

ax justice taking place at European level.

(5)    Which detrimental effects have been caused by the disclosure? The public interest must also be weighed up against all the detrimental effects of the impugned disclosure. If the Court recognised that PwC sustained some reputational damage, it noted that no longer-term damage had been established.

In this light, the ECtHR considered that the public interest in the disclosure of that information outweighed all of the detrimental effects.

(6)    What is the severity of the sanction imposed on the whistle-blowers? Lastly, the Court assessed the severity of the penalty imposed on M. Halet. Despite the minor character of its criminal conviction, the ECtHR underlined that the mere fact that the applicant was prosecuted and sentenced at the end of criminal proceedings which attracted considerable media attention constituted an undue restriction on freedom of expression. This entails a risk of obstructing or paralysing any future revelation by dissuading whistle-blowers from reporting unlawful or questionable conduct.

In light of the above considerations, and regarding the risk of chilling effect on any whistle-blower, the criminal conviction was considered as clearly disproportionate. The ECtHR concluded that there had been a violation of Article 10 of the ECHR.

Comments are closed.