Lawyers warn of huge claims

Lawyers have warned that new laws passed this month have raised the prospect of "very substantial" awards to victimised whistleblowers, writes Tony Tysome.

Agreement has yet to be reached by the government over compensation in cases of unfair dismissal. But the Public Interest Disclosure Bill, which received Royal Assent early this month, presents two options that could leave universities and colleges facing claims ranging from about Pounds 50,000 to hundreds of thousands of pounds.

Regulations to be introduced later this year are expected either to mirror special awards made to health and safety representatives, which are subject to a statutory cap of nearly Pounds 50,000, or to be unlimited.

If the government opts for the latter, institutions that have failed to take seriously safeguards for whistleblowers built into the act could be forced to pay hefty awards by the courts.

John Hall, chairman of the national education group of solicitors Eversheds, said: "It is possible to envisage a situation where a senior member of staff might claim not only for the loss of a job but also for subsequent stress that has made them unemployable. In such cases compensation is likely to be very substantial."

The act introduces new rights for workers to seek redress through industrial tribunal if they are dismissed or demoted for disclosing malpractice.

The key points are as follows:

* The legislation covers all workers, including consultants

* Victimisation includes demotion or being passed over for a job as well as dismissal

* Workers must pass more rigorous tests to qualify for an award if they blow the whistle externally before going through internal channels

* Penalties are high for institutions found guilty of victimisation.

According to Mr Hall, unlimited compensation is the most appropriate option if the legislation is to cover senior staff members adequately as well as those lower down the scale.

Institutions will need to ensure they have suitable arrangements to enable concerns to be raised internally without a "whistleblower" being victimised, he said.

"There should be a panel of internal assessors who can receive disclosures of malpractice in confidence," he said.