A qui tam lawsuit filed under the False Claims Act is perhaps one of the strongest whistleblower protection laws in the U.S. It is also one of the most serious cases a civilian can file and therefore must be done with caution and full understanding of the subsequent implications and/or consequences.
Unfortunately, there are dozens of complicated components concerning a qui tam lawsuit. If pursued without proper legal counsel, the whistleblower could suffer major losses – financial or otherwise.
This article is meant to shed a little more light on what a qui tam lawsuit really is; what it does, what it means, and the repercussions for all parties involved.
What Does “Qui Tam” Mean?
This term actually comes from the Latin phrase, “qui tam pro domino rege quam pro se ipso in hac parte sequitur,” which roughly means “he who brings an action for the king as well as for himself.”
Although generally pronounced “kee-tam” (rhymes with “pam” or “slam”), some other acceptable pronunciations include “kwee-tam” and “kwee-tom” (like the name “Tom.”)
The phrase was originally coined during the Middle Ages, when the king would offer his citizens a reward for policing and reporting violations of the law. This concept has since then evolved and adapted to modern society.
It is now known as the False Claims Act qui tam.
What Does Qui Tam Mean in Context with the False Claims Act?
Qui tam is a provision under the False Claims Act that legally enables an individual to sue another individual or entity that is defrauding the government. If proven and funds are successfully recovered, the people actively pursuing the case may earn a “whistleblower” reward.
In order to trigger an official government investigation (and all the subsequent necessary enforcement actions), the individual must file a “qui tam” lawsuit.
What is a Qui Tam Lawsuit?
Under the False Claims Act, a qui tam lawsuit is considered a type of “whistleblower” lawsuit wherein an individual (the proverbial “whistleblower”) reports fraud. The lawsuit is considered successful when the funds lost to the fraud are recovered and returned to the US Treasury and/or American taxpayers.
In many states, a qui tam lawsuit can be used to enforce the False Claims Acts that prohibit fraud against the state government. Qui tam lawsuits have helped recover billions of stolen dollars to date.
Some examples of fraud involved in qui tam lawsuits include Medicare and Medicaid fraud, procurement fraud, and defense contractor fraud.
Tax frauds, securities law violations, and commodities law violations can be reported by whistleblowers under other U.S. whistleblower protection and rewards programs, but such cases don’t call for qui tam lawsuits.
Can Anyone File a Qui Tam Lawsuit? Does that Automatically Make Them a Whistleblower?
Yes to both questions.
Any individual with information regarding a fraud against the government may file a qui tam lawsuit and become a whistleblower, regardless of that individual’s connection – or lack thereof – to the case. In most instances, it’s usually an employee of the company committing the fraud or a competitor of said company.
But really, any person with the information can legally set things in motion.
There are certain legal restrictions that help manage qui tam lawsuits and discourage people from taking advantage of it. For instance, there are restrictions that legally prevent more than one whistleblower from being rewarded for reporting the same fraud.
Qui tam lawsuits that are based on public information cannot legally be filed, either.
What Sort of Violations Necessitate a Qui Tam Lawsuit?
Under the False Claims Act, any of the following violations performed by an individual or entity entail a qui tam lawsuit:
If the individual or entity…
(1) Knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval.
(2) Knowingly makes, uses or causes to be made or used, a false record or statement important to a false or fraudulent claim for payment or to an obligation to pay or transmit money or property to the government.
(3) Knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the government.
How does a Whistleblower File a Qui Tam Lawsuit?
The qui tam lawsuit would be filed by an attorney on behalf of the whistleblower (or realtor, in qui tam cases). The attorney would put together a complaint describing the violations as reported by the whistleblower. There would also need to be supporting documents that could provide the government with information about the fraud being reported.
Are there Safeguards in Place that Ensure a Whistleblower’s Safety?
Yes, there are. Several of them, actually.
As mentioned earlier, the qui tam lawsuit is filed by an attorney on behalf of the realtor or whistleblower. The lawsuit is filed “under seal” in federal district court. This means that it will be kept confidential so that only the government is aware of the case.
By filing the lawsuit under seal, the government also has ample time to investigate the accusations and allegations made by the realtor. The information gleaned from the investigation will then help them determine their participation or active position in the qui tam case. Not even the accused will be informed of the qui tam case without explicit permission from the court.
Only when the government decides to join the case will the qui tam lawsuit be made public.
Provisions Against Retaliation
There are also provisions of the False Claims Act that protect realtors or whistleblowers that file qui tam lawsuits from retaliation. This means they can safely report fraud without worrying about any form of reprisal from the accused. This covers company employees, independent contractors, and agents. Whistleblowers that suffer retaliation in relation to the qui tam lawsuit may legally sue for doubled back pay and additional damages or reinstatement, wherever appropriate.
Relief for Retaliation
In the same vein, a realtor who is “discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against in the terms and conditions of employment” due to the qui tam lawsuit may seek relief under the False Claims Act.
Important! As a whistleblower…
… it is crucial that you choose the best possible attorney to file your lawsuit for you. You want a registered and experienced lawyer to handle this case to ensure you are as safe as possible. Qui tam lawsuits are never taken lightly, and the False Claims Act has unique procedures and rules that are unimaginably complex.
Failing to follow these to the letter could be costly.
You need the best people backing your claim. Make sure you do thorough research to find the best attorneys and carefully consider all your options before making a decision.
What Happens After Filing a Qui Tam Lawsuit?
After a qui tam case is properly filed by a licensed attorney, the government begins a thorough investigation into the allegations made against the accused. Under the False Claims Act, the case will be sealed (i.e., confidential) for a total of sixty (60) days during this investigation.
However, it is not uncommon for courts to extend the seal period in order to give the government more time to complete the investigation.
The evidence they gather from the investigation will determine their stance on the qui tam case. They only have two options: join or intervene.
Should the government choose to intervene, they take primary control over the case. But the whistleblower and their attorney are still expected to participate.
Should the government choose not to intervene, the whistleblower has the option to pursue the qui tam case on their own – still under the False Claims Act. But even if the government does not join the qui tam lawsuit at first, they may still ask court permission to join in later on. It is not, in fact, unheard of for the government to change its stance.
What are the Repercussions for Qui Tam Whistleblowers who are Found Liable?
Defendants that are found liable under the False Claims Act may have to pay as much as three times the government’s losses plus penalties for each false claim. However, it’s more common for both parties to resolve the case through settlement negotiations rather than a court trial.
How are Qui Tam Whistleblowers Rewarded?
If a qui tam lawsuit is successful, the whistleblower is lawfully rewarded – and quite substantially, too. This reward serves as an encouragement for other whistleblowers to step forward and file similar lawsuits when needed.
It is also proof that the government recognizes the professional and personal risks civilians take when they attempt to stop fraud operations against the government.
Should the government intervene in a successful case – whether through settlement or court trial – the realtor is given anywhere from 15% to 25% of the amount collected by the government.
If the government did not choose to intervene in a successful case, the realtor is rewarded anywhere from 25% to 30% of the amount collected.
The exact percentage depends on a number of factors, such as the quality of the information presented and the amount of work put in by the whistleblower and their attorney.
All in all, it’s safe to say that a qui tam lawsuit is a unique one. It grants civilians an opportunity to serve the government and their fellow taxpayers through lawful – albeit risky – means.
Let go over the key points we covered:
Keep in mind, however, that this article is simply meant to provide general information regarding the False Claims Act qui tam. If you need actual legal advice, we highly recommend speaking to a licensed attorney about your concerns.