Information Note on the Court’s case-law 251
May 2021
Halet v. Luxembourg - 21884/18
Judgment 11.5.2021 [Section III]
Article 10
Article 10-1
Freedom of expression
Criminal fine of EUR 1,000 for disclosing to the media confidential documents of a private-sector employer (“Luxleaks”) of insufficient public interest to counterbalance the harm caused: no violation
[This case was referred to the Grand Chamber on 6 September 2021]
Facts – The applicant was employed by the firm PricewaterhouseCoopers (PwC), which provides auditing, tax advice and business management services.
Between 2012 and 2014 several hundred advance tax rulings and tax returns prepared by PwC were published in various media outlets (the so-called “Luxleaks” affair) after being disclosed to journalists by the applicant and A.D. The information published highlighted a practice, spanning a period from 2002 to 2012, of highly advantageous tax agreements between PwC, acting on behalf of multinational companies, and the Luxembourg tax authorities.
The applicant received a criminal conviction as the courts did not accept whistleblowing as justification for his actions. However, A.D. was acquitted on the grounds that he had acted as a whistleblower.
Law – Article 10:
The applicant’s conviction for passing on confidential documents to a journalist who subsequently published them amounted to interference with the exercise of his right to freedom of expression. The interference had been prescribed by law and had pursued the legitimate aim of preventing the disclosure of confidential information and protecting the employer’s reputation.
1. Characterisation of “whistleblowing”:
Under Luxembourg law the acceptance of whistleblowing as justification, derived from Article 10, had the effect of erasing the illegal nature of the breach of the law. In such cases it was the statutory element of the offence, which had to have been committed as a result of the disclosure, in good faith and in a proportionate and appropriate manner, of information of general interest, which was thus erased, resulting in defendants being acquitted. The Court of Appeal had concluded that the applicant could not rely on the justification of whistleblowing as defined in domestic law.
It was not the Court’s task to express a view as to whether the statutory element of the offence of which the applicant was accused should be erased or not, as this was a matter for domestic law alone. Rather, it had to assess whether this was a whistleblowing case in which the principles established in that regard were applicable. Firstly, there had been a hierarchical bond between the applicant and his employer, PwC, which entailed a duty of loyalty, reserve and discretion on his part. That duty was a particular feature of the concept of whistleblowing. Secondly, the applicant had contacted a journalist in order to disclose confidential information obtained in the context of his employment relationship. Taking the view that there were parallels between the applicant’s actions and those of the applicants in the cases of Guja v. Moldova [GC] and Heinisch v. Germany, the Court found that the applicant should be regarded, in principle, as a whistleblower for the purposes of the Court’s case-law.
2. Compliance with the criteria established by the Guja case-law:
There was no dispute between the parties with regard to the first four criteria established by the Guja line of case-law. Thus, (1) the disclosures had been of public interest; (2) the information disclosed had been true; (3) informing the public through the media had been the only realistic means of alerting them; and (4) the applicant had acted in good faith. The only disagreement concerned the fifth and sixth criteria, namely the balancing of the public interest in receiving the information against the harm caused to the employer by the disclosures, and the proportionality of the penalty.
(a) As to the fifth criterion:
The applicant’s right to protection of his freedom of expression was in conflict with the right of his employer, PwC, to protection of its reputation.
The domestic courts had ruled that the fifth criterion was not satisfied since the disclosure by the applicant of documents that were subject to professional secrecy had caused harm to PwC – resulting, in particular, from the damage to the firm’s reputation and the loss of client confidence in its internal security arrangements – that outweighed the general interest. In balancing the interests at stake, the courts had thus attributed greater weight to the harm suffered by PwC than to the interest of the disclosures made by the applicant.
The Court of Appeal had assessed the non-pecuniary damage sustained by PwC before weighing up the relevant interests. However, under domestic law, that court could not award compensation in excess of the amount claimed by the civil party. It was common practice in Luxembourg for individuals or entities which had sustained non-pecuniary damage, including substantial damage, to waive monetary compensation and simply seek recognition of the damage and a symbolic award of one euro. The harm caused to PwC could not therefore be regarded as non-existent simply because the firm had assessed the damage at one euro and the Court of Appeal, after finding the existence of damage, had awarded compensation in that amount.
Although PwC had suffered harm owing to the very fact of the widely reported controversy arising out of the Luxleaks affair, the firm had subsequently seen an increase in turnover coupled with a significant rise in staff numbers. Hence, it had to be ascertained whether the damage to its reputation had been real and tangible. PwC’s financial fortunes did not appear to have suffered lasting harm and there was every indication that its reputation had not ultimately been compromised, at least not among the companies that made up its client base. Hence, while PwC had undoubtedly suffered harm in the short term, no longer-term damage to its reputation had been established.
The Court of Appeal had given detailed reasons for its findings regarding the fifth criterion established by the Guja case-law. Accordingly, the Court would require strong reasons to substitute its own view for that of the domestic courts. That situation did not apply in the present case, for the following reasons.
The Court of Appeal had assessed the interest of the applicant’s disclosures with care, examining in depth their content and their repercussions in terms of multinational companies’ tax practices. In that context it had acknowledged that the disclosures were of general interest. It had even taken into consideration the impact of the information, accepting that it was liable to “concern and shock people”.
The Court of Appeal had nevertheless held that the interest of the applicant’s disclosures weighed less heavily than the harm suffered by PwC, after finding that those disclosures had been of limited relevance. In reaching that conclusion it observed that the documents had not provided any information that was vital, new or previously unknown. Thus, the Court of Appeal had not added any new criteria to those established by the Court’s case-law. On the contrary, the three qualifiers – “vital, new and previously unknown” – were encompassed in the Court of Appeal’s exhaustive reasoning on the balancing of the private and public interests at stake. In other circumstances these terms might be considered too narrow, but in the present case they had served, together with the other elements taken into account by the Court of Appeal, to found the conclusion that the applicant’s disclosures had lacked sufficient interest to counterbalance the harm suffered by PwC.
The Court of Appeal had confined itself to examining the evidence carefully in the light of the criteria established by the Court’s case-law, before concluding that the documents disclosed by the applicant had not been of sufficient interest to justify acquitting him. The fact that A.D. had been acquitted after the same criteria based on the Court’s case-law had been applied confirmed that the national authorities had carried out a detailed examination in weighing up the relevant interests.
(b) As to the sixth criterion:
The domestic courts had taken into consideration, as a mitigating factor, the “disinterested nature of the [applicant’s] actions” and had therefore imposed a fairly modest fine (1,000 euros). This could reasonably be regarded as a relatively mild penalty that would not have a real chilling effect on the exercise of the applicant’s freedom or that of other employees, while encouraging those concerned to consider the legitimacy of their intended actions.
In sum, regard being had to the Contracting States’ margin of appreciation in this sphere, the domestic courts had struck a fair balance in the present case between the need to protect the rights of the applicant’s employer on the one hand and the need to protect the applicant’s freedom of expression on the other.
Conclusion: no violation (five votes to two).
(See also Guja v. Moldova [GC], 14277/04, 12 February 2008, Legal summary; Uj v. Hungary, 23954/10, 19 July 2011, Legal summary; Heinisch v. Germany, 28274/08, 21 July 2011, Legal summary; Medžlis Islamske Zajednice Brčko and Others v. Bosnia and Herzegovina [GC], 17224/11, 27 June 2017, Legal summary)
© Council of Europe/European Court of Human Rights
This summary by the Registry does not bind the Court.
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