The new whistleblower regime : a strategic risk management tool

Published on 11 october 2023


Litigation – Arbitration – Mediation

The emergence of regulations protecting whistleblowers, recently amended and harmonised at European level, may have been perceived by companies as a constraint and even a threat. What is the real situation, just one year after the Waserman Act came into force ? How are the regulated professions affected by these provisions ?

Facilitating the disclosure of internal corporate misdeeds is not, at first sight, a pleasing prospect. However, while the existing legal framework now offers greater protection, in particular by requiring private sector entities with more than 50 employees to implement an internal whistleblowing procedure, this obligation opens up opportunities and proves to be an excellent risk management tool.

A broader definition of whistleblowers 
The law "aimed at improving the protection of whistleblowers" of 21 March 2022, known as the "Waserman Law*", defines a whistleblower as "a natural person who reports or discloses, without direct financial consideration and in good faith, information relating to a crime, an offence, a threat or harm to the general interest, a violation or an attempt to conceal a violation of an international commitment duly ratified or approved by France, of a unilateral act of an international organisation taken on the basis of such a commitment, of European Union law, or of a law or regulation".

The granting of whistleblower protection status is conditional on : 

  • whistleblowing in the public interest and no longer, as was the case under the Sapin II Act, only the commission of a criminal offence or a breach of a standard. As a result, this includes not only breaches of various regulations (social, environmental, health, economic, etc.), but also, potentially, other practices that run counter to essential principles;

  • the whistleblower must be acting in good faith ; 

  • the absence of direct financial compensation. The extension of the protection afforded to whistleblowers is significant, since until now protection was only afforded when they acted in a disinterested manner. In other words, a moral or reputational interest, or even an indirect financial interest, no longer automatically excludes the associated protection. Personal knowledge of this information, except where it comes to him in the course of his professional activity.

Certain professionals excluded from the scope of whistleblowing
Regardless of the ethical nature of the whistleblowing, the denunciation of certain facts remains excluded from the protection afforded to whistleblowers. In particular, facts, information and documents whose revelation or disclosure is prohibited by provisions relating to national defence secrecy, medical secrecy or lawyer-client privilege are excluded from the scope. 

Nevertheless, the whistleblower protection regime can be applied, including to people who are subject to specific secrets in the context of their professions. For example, a health professional who reports facts relating to a serious risk to health or the environment benefits from the status; or who, informed of deprivation, ill-treatment or harm inflicted on vulnerable persons or minors, discloses them. It should be noted that this protection is coupled with an obligation to disclose, non-compliance with which is punishable by law. 

Easier reporting 
The Waserman Act marks a fundamental difference from the Sapin II Act in that it allows whistleblowers to use one of the following channels at their discretion, without priority:

  • the internal channel set up by the company, i.e. reporting as part of the specific system that companies with more than 50 employees must put in place ; 

  • the external channel, consisting of a list of authorities designated by decree no. 2022-1284 of 3 October 2022. These authorities include not only the public prosecutor, but also professional authorities. In the field of public health, for example, the various national councils (e.g. the Order of Physicians, the Order of Dental Surgeons, etc.) and the French National Authority for Health (HAS) are competent to receive these alerts. 

Public disclosure, particularly through the press, without prior external warning, is possible if the authorities fail to react within a reasonable time, and may even be implemented immediately in the event of imminent or obvious danger to the general interest.

Greater protection for whistleblowers
The obligation of confidentiality that was previously guaranteed to the whistleblower is now extended to his or her entourage (in particular facilitators, colleagues, family circle but also certain legal entities), as well as to all third parties mentioned in the report. 
In addition, whistleblowers are protected against any reprisals they may suffer, including dismissal (in which case the employer must prove that the termination of the contract was unrelated to the whistleblowing). 

The most significant innovation contained in the Waserman Act is that whistleblowers will not be held criminally or civilly liable until the entity or person against whom the whistleblowing is directed can prove that there has been an invasion of privacy, or that the report is slanderous or untrue.  
In addition to this protection, whistleblowers benefit from procedural safeguards such as the presumption that they have complied with the terms of the whistleblowing agreement and the allocation of an advance to cover their costs before any judicial decision is taken. 

Internal whistleblowing: an opportunity to manage risks rather than just being exposed to them 
Internal whistleblowing should not be seen (only) as a restrictive and purely formalistic procedure. A pragmatic approach can transform it into a genuine tool for cultural change in risk management and the role of CSR. Indeed, its effectiveness depends not only on the existence of the required guarantees - for example in terms of confidentiality, the absence of reprisals or data security - but also on the deployment of educational efforts and the establishment of a dialogue with the members of the organisation concerned. 
Rather than suffering a late disclosure, when the damage has become irreversible and the legal risk has become too great, companies have an obvious interest in being able to raise health, social, environmental, competitive or integrity concerns at an early stage. Even if this is a virtuous function, the difficulty of detecting risks at a minor stage means that they have to be dealt with appropriately.

What's more, by ensuring that information is passed on, the internal whistleblowing procedure is an invaluable tool that enables the organisation to resolve existing difficulties, or even anticipate them. Ultimately, the organisation is able to reduce not only its exposure to the risk of sanctions, but also the reputational risk that often eludes it.  All regulated professions are particularly exposed to certain categories of risk (fraud, money laundering, etc., for the legal and accounting professions; health risks for the medical professions).

Companies therefore have a particular interest in channelling, organising and standardising the reporting framework, even when they do not fall within the scope of the obligations, to avoid being overwhelmed by the consequences of external reports. However, they should certainly not consider this as a means or an end to hinder the progress of the alert. On the contrary, they must be able to deal with the matter themselves, if necessary by carrying out the necessary internal investigations while respecting fundamental rights, labour law, the ethical rules specific to each profession and the basic principles applicable.

They must then take the necessary measures to remedy any liabilities (managerial, legal or technical); this is not without its difficulties, particularly in effectively removing internal conflicts of interest. As a result, companies have a responsibility to investigate and decide on breaches that occur in the course of their business, even when they are not directly guilty of any breach. Although this responsibility is not their initial vocation, it appears not only necessary in the general interest, but also useful in protecting the company against situations that threaten its assets and reputation. It's a way for them to control their own destiny, rather than being subjected to it.

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