What is Qui Tam

Introduction to Qui Tam Under the False Claims Act

Qui tam is a provision under the False Claims Act (FCA) that empowers individuals to act as whistleblowers and file lawsuits on behalf of the government against entities committing fraud. These courageous individuals, known as relators, play a pivotal role in exposing and deterring fraudulent activities against government funds and programs.

The Role of Relators in Qui Tam Actions

Relators are central to qui tam lawsuits, bringing to light fraudulent conduct that might otherwise go undetected. By filing a qui tam action, they not only safeguard public resources but also stand to receive a portion of the recovered funds as a reward for their contributions.

Key Components of a Qui Tam Lawsuit

• Filing Under Seal: Initially, qui tam lawsuits are filed under seal, keeping the action confidential to allow the government to investigate the allegations without public disclosure.
• Government Intervention: After reviewing the evidence, the government may decide to intervene and take over the prosecution of the case, or it may decline, allowing the relator to proceed on behalf of the government.
• Monetary Rewards for Relators: If the lawsuit results in a recovery, relators can receive between 15% and 30% of the amount recovered, depending on various factors including the level of the government’s involvement.

The Legal Framework of Qui Tam Actions

The False Claims Act sets forth stringent requirements for qui tam actions, including:

• Material Misrepresentation: The defendant must have knowingly submitted or caused the submission of false or fraudulent claims to the government.
• Original Source Requirement: Relators must bring forward information that is not publicly known or previously disclosed, unless they are the original source of that information.

What is the Process of a Qui Tam Lawsuit?

The process of a qui tam lawsuit under the False Claims Act involves several key steps:

Preparation and Filing

The whistleblower, also known as the relator, prepares the complaint with the assistance of legal counsel. This complaint details the fraudulent actions against the government. It is filed confidentially and under seal in a federal district court, meaning it is not accessible to the public or the defendant at this stage.

Government Review

Upon filing, the complaint and a written disclosure of all material evidence and information are served on the government, but not on the defendant. The government then has a statutory period, typically 60 days, to investigate the allegations. This period can be and often is extended to allow the government more time to investigate.

Government Decision

After its investigation, the government decides whether to intervene in the lawsuit. If the government intervenes, it takes over the lead in the litigation, though the relator and their attorneys typically remain involved in the case. If the government decides not to intervene, the relator has the right to proceed with the lawsuit on behalf of the government.

Litigation

The case proceeds through the court system, where both parties present evidence and arguments. If the government has intervened, the Department of Justice (DOJ) leads the litigation process. If the relator continues the case without government intervention, they and their legal team manage the litigation.

Resolution 

Qui tam lawsuits can be resolved in various ways, including settlement, dismissal, or trial verdict. Settlements are the most common resolution, where the defendant agrees to pay a certain amount to avoid further litigation and a potential trial.

Rewards for Relators

If the lawsuit results in a recovery of funds to the government, the relator is entitled to a portion of the recovery. The share can range from 15% to 25% if the government intervened and up to 30% if the government did not intervene and the relator pursued the case independently.

Public Disclosure: 

Once the case is resolved or if the government decides not to intervene, the complaint is unsealed and becomes public record. However, details of the government’s investigation and reasons for its intervention decision typically remain confidential.

This process underscores the critical role of whistleblowers in uncovering and addressing fraud against government programs and ensures that they are compensated for their contributions to public integrity and the protection of taxpayer funds.

Challenges and Considerations in Qui Tam Litigation

Qui tam litigation is complex and fraught with legal challenges, including:

• Statute of Limitations: Qui tam actions must be filed within specific timeframes, typically within six years of the fraudulent activity.
• Public Disclosure Bar: If the fraud has already been publicly disclosed through certain channels, a relator may be barred from filing a qui tam action unless they qualify as an original source of the information.

Bracker & Marcus Represent Whistleblowers Under Qui Tam Statutes

Qui tam provisions under the False Claims Act serve as a powerful mechanism for combating fraud against government programs. By enabling private individuals to take legal action, the FCA encourages accountability and protects public funds. Relators, armed with insider knowledge and evidence of wrongdoing, are instrumental in these efforts, contributing significantly to the integrity of government operations and the safeguarding of taxpayer dollars.

Through diligent enforcement and the participation of vigilant citizens, qui tam actions reinforce the principles of justice and fairness in government contracting and spending, ensuring that entities engaging in fraudulent practices are held accountable for their actions. Bracker and Marcus is committed to representing those who seek to hold the powerful accountable.