Qui Tam Actions

Qui tam actions are lawsuits filed by individuals who believe that an entity is defrauding the government in some way. A qui tam action lets the government recover lost money due to the employer's fraud. It may also give the employee a percentage of recovery as a reward for filing the suit.

The term "qui tam" is based on the Latin phrase: "[he] who sues in this matter for the king as well as for himself." This is a reference to the monetary rewards that qui tam whistleblowers can reap from successful claims. 

Liable defendants in qui tam lawsuits are often ordered to pay all court costs, expenses, and attorney's fees. This is in addition to repaying the disputed amount. 

There is no requirement to show that the defendant intended to defraud the government. Rather, the court must prove that the defendant submitted the false claim with the knowledge that it was false or with reckless disregard.

Whistleblower Rewards and the False Claims Act

The federal False Claims Act (FCA) allows those not affiliated with the federal government (i.e. private sector employees) to file claims alleging fraud against the government. Congress strengthened the law in 1986 in the wake of reports that price gouging by defense contractors was routine. 

A federal contractor that sells the government equipment known to be defective may be accused of violating the FCA. To file a claim under the FCA is to "blow the whistle." As with other whistleblower claims, qui tam actions must be made in good faith to receive legal protections.

Those who bring qui tam actions under the FCA are eligible for between 15%-25% of the amount of fraud recovered. If a contractor overcharges the government by $100,000, the person bringing the claim may receive between $15,000 to $25,000 as a reward.

False claims are any action that is intended to defraud the government, and can include:

• Overcharges
• Charges for services not provided
• Failure to deliver sold items
• False reports about a product's quality
• Failure to properly test products

How To Bring a Qui Tam Action: The Basics

Any individual may bring a qui tam action against an entity that has allegedly defrauded the government. When a private citizen initiates a qui tam claim, called the "qui tam relator," it is filed under seal for at least 60 days and kept confidential. 

The government investigates the allegations during this time and, if it decides to get involved, takes over the qui tam action. Absent government involvement, the individual still may pursue the action on their own.

The civil complaint on the qui tam action must include a written disclosure of substantially all material evidence and information, according to federal law. It's important to stress that this information may not be freely disclosed outside of the complaint.

Common Types of Qui Tam Cases

Qui tam lawsuits often center around various forms of healthcare-related fraud. This includes Medicaid and Medicare fraud, healthcare fraud, and other fraudulent claims to government healthcare programs.  

Qui tam cases extend beyond healthcare, encompassing a wide range of government fraud. These cases can involve financial fraud, such as tax evasion or securities fraud, as well as procurement fraud, where contractors overcharge the government for goods or services. 

Regardless of the specific type of fraud, qui tam cases play a crucial role in uncovering and addressing fraudulent activities that harm taxpayer funds and government integrity.

Damages and Awards in Qui Tam Actions

It's typical for damages and awards to be set at three times the amount unlawfully obtained. Additional penalties range from $5,000 to $10,000 per claim, as well as punitive damages in severe cases. Moreover, defendants may be responsible for covering court costs and reasonable attorneys' fees for all parties involved, adding to the financial burden of violating the Act.

Successful relators in qui tam actions may receive awards determined by the court, contingent on government intervention. If the government intervenes, the relator is entitled to between 15%-25% of the recovered amount. If the relator prevails without government assistance, they may receive a higher award ranging from 25%-30% of the total fraud amount. 

In addition, relators may seek special damages such as reinstatement, back pay, and reasonable attorneys' fees.

Learn About Qui Tam Actions

To learn more about qui tam whistleblower actions, click on one of the following links:

• Awards in Qui Tam Actions: How monetary awards for damages are determined in qui tam whistleblower lawsuits, in which the individual blowing the whistle is entitled to a percentage of the total amount recovered.
• Qui Tam Actions: Overview: Basic information about qui tam whistleblower actions, in which an employee files a complaint that their employer has defrauded the government in some way.
• Government Involvement in Qui Tam Actions: An overview of government involvement in qui tam whistleblower actions after a formal complaint is filed, including the key decision to either join or decline to join the complaint.
• Whistleblower Protections in Qui Tam Actions: How state and federal whistleblower laws protect individuals who speak out about the illegal activities of their employers, particularly those involving fraud against government entities.

You Don't Have To Solve This on Your Own – Get a Lawyer's Help

You don't have to navigate a qui tam lawsuit alone. Seek legal advice from experienced whistleblower attorneys to gain clarity on your options and ensure your rights are safeguarded within the realm of employment law. Connect with an attorney near you who specializes in whistleblower cases and can provide the assistance you need.