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The term "Qui Tam" refers to lawsuits filed under the Federal False Claims Act by a "whistleblower". On the theory that private citizens can often detect fraud against the Federal government when the government itself cannot, Congress enacted this law to create a monetary incentive for private citizens to uncover fraud against the Federal pocketbook. Many State governments have adopted their own versions of this law. The way these work is this:
1. The Suit is "On Behalf" of the Government . The whistleblower files his lawsuit against the defrauder explaining how he cheated the government, and saying the suit is on behalf of the government (Federal or State, whichever is applicable). "Qui Tam" is a Latin phrase meaning "on behalf of the government." Qui Tam suits can be filed against companies, individuals or groups, whoever has cheated the government out of money.
2. The Private Citizen Gets a Share of the Recovery . If the suit is successful, since it is "on behalf" of the government, it is the government which wins the most, but the whistleblower can receive up to 30% of the money collected from the defrauder. The court hearing the case has discretion on this percentage, but historically it averages about 17% .
3. The Government Can Take Over the Case . After the suit is filed, the government can choose to step-in and assume control of the case using government lawyers ("intervene"). This does not take away the whistleblower's right to a share of recoveries. Alternately, the government can choose to stand by and let the whistleblower's attorneys continue to handle the case.
4. The Case Remains Secret While the Government Decides . A Qui Tam lawsuit is always filed "under seal", which means its existence is unknown to the defrauder and the public. This continues until the government decides whether or not to have its lawyers take over the case, or "intervene." Often this secret period continues for many months. When a decision is made on "intervention", the lawsuit is "unsealed" which means it becomes public knowledge, and the defrauder receives a copy of the complaint.
Important Details
The Whistleblower Gets Legal Protection . The law creating the Qui Tam lawsuit also provides protections against retaliation and harassment of the Whistleblower. For instance, if the Whistleblower works for the defrauder, he cannot be fired or disciplined for bringing the case, and if he is, he can collect ample damage awards from the defrauder. The Whistleblower doesn't have to win the Qui Tam case to enjoy this protection; Whistleblowers can win money awards against retaliation entirely apart from winning the case in chief. The protections apply to Qui Tam filers whether or not the fraud case prevails.
Under the law, Damages may be Substantial . The amount sued for in a Qui Tam case isn't limited to the dollars taken from the government. The Federal False Claims Act and several of its state law counterparts provide for "treble damages" meaning the government is entitled to get back $3 for every $1 the evildoer takes; also the law provides special fines and penalties which can drive the money claim against the defrauder sky-high . This mean the Whistleblower's potential share can get very big very fast.
Today's Legal Atmosphere Favors Qui Tam Suits . The Qui Tam law (the Federal False Claims Act ) was originally enacted during the Civil War when Congress felt that widespread defrauding of the U.S. government was out of control . As this sort of feeling has waxed and waned in U.S. history, Courts have favored and disfavored Qui Tam suits accordingly. Today there is a perception in Congress that billions of dollars are being stolen or defrauded from the trillions being spent on Healthcare and Defense budgets, just to name the 2 biggest areas. Congresshas amended the False Claims Act to make it easier for Whistleblowers, and most government agencies react favorably to Qui Tam suits. The Courts recognize this, and Qui Tam cases tend to receive a fair hearing in today's legal climate.
Qui Tam Lawsuits Help the Nation . Today's Qui Tam lawsuits are a successful public/private partnership which do exactly what Congress intended back during the Civil War - return money wrongfully gotten from the government, and deter potential defrauders. Private citizens do benefit from whistleblowing, but the biggest benefit always accrues to the United States itself, when ill-gotten gains are returned to the public treasury and wrongdoing is punished. |
