Personal liability of individuals for whistleblowing detriment claims

In most cases when directors or senior employees of a business take decisions relating to the workforce, they can sleep easily at night on the basis that, while they may create a liability for the business, they will not be personally liable for their actions but they are some key exceptions to this principle.

In most cases when directors or senior employees of a business take decisions relating to the workforce, they can sleep easily at night on the basis that, while they may create a liability for the business, they will not be personally liable for their actions. 

There are some key exceptions to this principle. The two established and fairly well-known exceptions are the personal liability of statutory directors in certain prescribed circumstances by virtue of their office (for example, in relation to serious health and safety offences or corporate manslaughter), and the personal liability of an employee who does something which constitutes an act of unlawful discrimination for which their employer would be liable. 

However, following the Court of Appeal decision in Timis v Osipov, we have to add a further exception to this list, which is likely to be of widespread application (or concern, depending on your perspective). It is now clear that individuals can be personally liable for causing the dismissal of an employee if the dismissal is retaliation for the employee having raised a protected disclosure in the public interest. 

The circumstances of this case

Mr Osipov was briefly the CEO of an oil exploration company operating in Niger. Shortly after taking up the post, Mr Osipov made a number of protected disclosures relating to corporate governance and compliance with foreign laws affecting the company. Mr Osipov was dismissed. He brought a claim under the whistleblower protection regime against the two non-executive directors who had, between them, decided to dismiss him. 

The Employment Tribunal found that the primary reason for Mr Osipov’s dismissal was because he had made protected disclosures, and that Mr Osipov had suffered financial losses caused by his dismissal in the region of £1.7 million. The key issue in the litigation was whether the two directors could or ought to be liable for this loss. 

Why claim against individuals?

On the face of it, it is unusual for an person in Mr Osipov’s shoes to bring a claim against the individuals within the corporate who brought about his dismissal. Many would that assume that the termination of an employment relationship is only a matter between employer and employee, the employer here being a corporate entity with its own legal identity.

Notwithstanding the Court of Appeal decision, it remains the case that a claim for unfair dismissal, or for breach of contract regarding a dismissal, can only be brought against the employer. In any event, it will normally be the employer which has the deepest pockets and is therefore the most practical choice of respondent. 

However, in this case, the employer was insolvent, whereas the directors had the benefit of directors’ and officers’ (D&O) insurance which covered any prospective liability. These facts reversed the normal considerations which apply to the choice of respondent.

So how and why were the directors liable?

Whistleblowers are protected from both being dismissed and also from suffering any other detriment as a result of having blown the whistle. Historically, only the employer could be liable for dismissal or any detriment. However, the law changed in 2013 so that colleagues of whistleblowers could also be personally liable (potentially in addition to the employer) if they had subjected the whistleblower to a detriment for having blown the whistle.

The policy was to align the whistleblower protection regime with the established anti-discrimination regime. It was considered that protection for whistleblowers was as important as protection from discrimination, and as such those responsible for unlawful acts against whistleblowers should face personal liability in the same way as those who perpetrate acts of discrimination. 

However, at first it seemed that this was a change with little practical impact. In most cases, a whistleblower will only incur significant financial loss if they are dismissed as a result of blowing the whistle, and it was widely assumed that the only remedy for this injustice was a claim of unfair dismissal, which is only available when the whistleblower is an employee and, by definition, can only be brought against the employer.

This assumption was reinforced by a specific provision of the Employment Rights Act 1996 (section 47B(2)) which, on the face of it, provides that where a whistleblower is an employee and the alleged detriment also amounts to an unfair dismissal, there is no separate claim for detriment available (ie, the only remedy is a claim for unfair dismissal). 

The core of Ms Osipov’s case was that the directors had subjected him to a detriment by resolving to dismiss him, and therefore should be liable for the financial losses which flowed from his dismissal. The directors argued Mr Osipov could not bring a claim for detriment where the detriment in question was his dismissal, citing the provision of the Employment Rights Act 1996 discussed above.

Who can be considered liable for dismissal-related detriment?

However, both the Employment Tribunal (at first instance) and the Employment Appeal Tribunal (on appeal) construed this provision as one which only regulated which claims could be brought against the employer. This provision did no more than limit a complaint against the employer regarding the dismissal itself to a claim for unfair dismissal.

Therefore, the provision did not affect potential causes of action against respondents other than the employer, and as such a claimant is able to bring a claim for dismissal-related detriment against such respondents. This reasoning has now been definitely endorsed by the Court of Appeal. 

The Court of Appeal considered that to limit the ability for claimants to bring claims regarding their dismissal to just a claim for unfair dismissal would produce incoherent results, and could not have been intended by Parliament.

For example, colleagues who victimised the whistleblower prior to and in ways unrelated to dismissal (such as applying the proverbial “cold shoulder” in the workplace, or passing the whistleblower over for promotion, or denying them a bonus) would be liable whereas the person or persons who decided to dismiss would face no personal liability. 

Further, protection from detriment for having blown the whistle is not just granted to employees; it attaches to “workers” too (ie, those occupying a legal “middle ground” between employees and the genuinely self-employed).

If the relevant provision in the Employment Rights Act 1996 was taken at face value, it would preclude employees from bringing a dismissal-related claim against colleagues but leave workers at liberty to do so, by virtue of the fact that workers cannot bring an unfair dismissal claim.

Where does this leave us?

The Court of Appeal decision drastically overturns the position most thought applied before this litigation began. 

Any colleague of a whistleblower, provided that both colleague and whistleblower have the legal status of worker or employee, can be personally be liable for subjecting the whistleblower to a detriment for having blown the whistle. Crucially, if that detriment results in the dismissal of the whistleblower, the colleague will be liable in principle for all financial losses which are caused by the dismissal. 

Even if the colleague only plays a part in the chain of events which results in dismissal, that may be sufficient. In Mr Osipov’s case, both directors were found jointly and severally liable for losses flowing from Mr Osipov’s dismissal: one had made the positive decision to dismiss and the other had concurred, but the latter was still considered to have been party to the decision-making process. 

Readers should also bear in mind that, under the current state of the law, even complaints focused on a complainant’s personal circumstances can constitute whistleblowing disclosures which qualify for protection.

Moreover, there is a prospect that a whistleblower could recover more from an colleague in a claim for dismissal-related detriment than they could in a claim for unfair dismissal against the employer, assuming said colleagues had the means to pay any award. This is because an Employment Tribunal can award compensation for injured feelings in detriment claims (up to £43,000 in the most serious cases) but cannot do so in an claim for unfair dismissal.

What can business do to mitigate exposure?

Looking at this in the round, there is potentially a wide-ranging personal exposure for individuals within an organisation. Other than exercising caution in response to complaints about malpractice, businesses should consider D&O insurance cover for key individuals to mitigate this exposure. The terms of any such policy should be checked carefully, both in respect of who is covered and which acts or omissions cover might attach to.

Businesses should also bear in mind the corrosive effect of whistleblowers bringing claims directly against their colleagues; in our experience, if key decision-makers in the business become embroiled in litigation, the dispute can swiftly become personal and highly emotive. We may see the strategic naming of individual respondents in the hope that the business can ill-afford for key personnel to become distracted, giving it a greater incentive to settle the matter. 

Lastly, one might ponder how far this Court of Appeal decision has eroded the value of the right to bring a claim for unfair dismissal. In most contexts, the ability to bring an unfair dismissal is a valuable recourse only available to employees in an action against their employer. In effect, in the whistleblowing context, a broadly equivalent action is now available to all workers against individuals within their organisations, provided they have the financial means to satisfy an award.

There remain some unique attractions to an unfair dismissal claim, notably the ability to recover a basic award (equivalent to a statutory redundancy payment) in additional to financial losses, and the prospect of claiming interim relief (ie, an order that the employer continues to employ the whistleblower, or at least continues to pay them, pending a full hearing). However, while unfair dismissal claims should always be brought in the alternative if they are available, they are no longer the only gateway to recovering compensation for dismissal.

Our content explained

Every piece of content we create is correct on the date it’s published but please don’t rely on it as legal advice. If you’d like to speak to us about your own legal requirements, please contact one of our expert lawyers.

Mills & Reeve Sites navigation
A tabbed collection of Mills & Reeve sites.
My Mills & Reeve navigation
Subscribe to, or manage your My Mills & Reeve account.
My M&R


Register for My M&R to stay up-to-date with legal news and events, create brochures and bookmark pages.

Existing clients

Log in to your client extranet for free matter information, know-how and documents.


Mills & Reeve system for employees.