Qui Tam Litigation
Plaintiffs normally sue defendants to recover for a loss they suffered. In fact, a plaintiff often must show “standing,” or the fact that they are the right party to sue the defendant because they are the ones who suffered the loss the defendant caused.
But in some situations, a plaintiff may sue to recover money that the defendant stole from the government. These lawsuits, pursuant to laws like the False Claims Act, permit plaintiffs to bring qui tam lawsuits in the name of the government as its “relator.” And, if the plaintiff prevails, it can keep a portion of the recovered funds.
Lawsuits like this encourage whistleblowers to come forward to spot and address abuse. They also require a lot of work and often involve large sums of money.
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Image credit: https://en.wikipedia.org/wiki/Whistle#/media/File:Party_whistle_on_radio.jpg
The False Claims Act
Lots of people submit bills to the government for payment and reimbursement. A government contractor may submit an invoice for work building a bridge or supplying goods. Or a doctor may submit an invoice to be reimbursed by government medical programs like Medicare and Medicaid. Laws like the False Claims Act make it illegal for people to submit false information on these bills to induce the government to pay them more than it should.
People often do it anyway, often because they believe they can get away with it. And the False Claims Act enables the government or others to sue to recover fraudulently obtained funds, plus extra amounts as penalties. In 2021 alone, the government recovered $5.6 billion with the law and nearly 600 of the lawsuits involving the law were filed by private plaintiffs. The bulk of the recovered funds that year arose from healthcare fraud cases.
The government on its own may only be able to catch a certain number of thefts or frauds. But by giving whistleblowers an incentive to report fraud and abuse, the government can pursue a lot more claims and recover more money, even if it needs to share some of it (often between 15-30%) with the whistleblowers.
Qui Tam Procedure
Qui Tam lawsuits may not begin the same way as a standard breach of contract case. Instead, a relator must first file the complaint “under seal” so that the complaint is not publicly accessible. The relator must then also serve the complaint on the government, together with details about the evidence that supports the claim.
The government can then decide whether it wants to pursue the claim itself. If the government pursues the claim, the relator has much less work to do, but may also enjoy less of a reward. But if the government declines, then the relator may still continue to pursue the claim and enjoy a greater share of the ward if he or she succeeds. But since the government often pursues the strongest cases, a relator may have difficulty winning on a case that the government declined to pursue.
If the government takes the case, however, this poses a great challenge to the defendant. While a private plaintiff may only pursue a case if it looks economically viable, the government has more resources than a regular plaintiff, and thus may be more willing to take a case to trial or hold out for a high settlement.
The process of government approval, however, takes awhile. It is common for cases to wait years while the government makes its decision.
Anti-Retaliation Provisions
Defending against a qui tam lawsuit is an expensive and difficult process. And so an employer may be upset at a current or former employee who initiated a claim. But the law prohibits defendants from retaliating against a qui tam whistleblower.
Moreover, the law allows a whistleblower to collect attorneys’ fees and other damages against a defendant that retaliates against him or her.