Whistleblower (Qui Tam) Law Whistleblower FAQ
Becoming a whistleblower is no easy decision. The process is difficult and sometimes intimidating. If you are considering filing a federal whistleblower lawsuit against your employer, current or former, please read our explanations to the most frequently asked whistleblower questions.
What is Qui Tam?
The term “Qui Tam” literally means “he who sues on behalf of the king as well as himself,” and is derived from the Latin qui tam pro domino rege quam pro se ipso in hac parte sequitur.
Qui Tam is a provision in the False Claims Act which allows individuals who have knowledge of fraud against the government to file civil lawsuits against these entities on behalf of the government, and to ultimately share in the money recovered. This law is one of the most powerful tools that individual private citizens have, to expose and litigate against contractors and other entities, who they know have defrauded the government.
The concept of litigating against a person or entity who has committed fraud against the government, in exchange for a reward, is not exactly new. It can be traced back to medieval England, where private individuals were encouraged to help in maintaining law and order, in exchange for a monetary reward. The lack of organized law enforcement meant that such laws encouraged citizens to act as police officers, with a reward for their trouble. This not only helped maintain order, but also rewarded citizens for their effort.
Cut to centuries later, and modern Qui Tam provisions, although immensely more complex and sophisticated, involve the same benefits. They allow individuals who have knowledge of fraud against the government, to use this knowledge to litigate against these entities, and recover the defrauded funds, with the promise of a reward in the form of a share of the recovered funds. Qui Tam provisions provide a powerful incentive for individual citizens who have this knowledge, to come forward and work together, with or without the cooperation of government agencies, in order to recover the money. They also act as a deterrent to those individuals who are considering fraud against the government.
Qui Tam provisions are contained in the False Claims Act, which was passed in 1863 during the Lincoln administration. Since then, the Act has undergone several amendments, which chipped away at its power to incentivize whistleblowing. Finally in 1986, new amendments expanded the scope of the Qui Tam provisions, allowing more numbers of persons, directly or indirectly involved in fraud, to be included.
Since 1986, these stronger Qui Tam provisions have resulted in more than 4,000 successful claims, ending with many billions of dollars worth of damages in awards and settlements. From Medicare fraud to defense kickbacks, and diverted research funds to pharmaceutical fraud, Qui Tam statutes have allowed thousands of American citizens to boldly come forward to prosecute government fraud.
What is the False Claims Act?
The False Claims Act, also known as the Lincoln Law, was enacted in 1863 during the Civil War, in response to widely prevalent, massive, defense procurement fraud, in which defense contractors were billing the government for subpar services and goods. The False Claims Act allowed private citizens with knowledge of such fraud being perpetrated on the government, to come forward to share their knowledge in litigation against the fraudsters, and also share in the recovery of any money.
Defense procurement fraud was pervasive during the Civil War. Fraudsters billed the government for supplying dead mules, defective rifles, rotting provisions, and gun boxes filled with sawdust. Others billed the government over and over again for supplying the same horses. It was not that the Lincoln administration was unaware of the massive levels of fraud that sucked federal coffers dry. However, the administration lacked the resources to help trace fraud and recover the money.
Qui Tam provisions that roped in private citizens, empowering them to act on behalf of the government and get a reward, were not exactly unknown at the time. These had been part of law in medieval England, and during a time of war, when the levels of trickery and fraud reached their zenith, the need for a law that would lure private citizens with information of fraud to share this information, gained new urgency.
The federal administration, and President Lincoln in particular, advocated the passing of the False Claims Act. In its original form, the False Claims Act imposed a $2,000 penalty on the fraudster, and allowed for recovery of double the damages. Private citizens, who filed Qui Tam also known as relators, would receive 50% of the money recovered.
These laws were successful, and the status quo was uninterrupted until 1943. That year, Congress enacted massive changes to the False Claims Act, which included a substantial drop in the awards that relators would be eligible for. The prospect of a substantial share of the funds recovered has always been one of the driving forces behind the Qui Tam provisions, incentivizing individuals to come forward with information of fraud. When Congress diminished the size of the relator’s award, the number of people coming forward with information about fraud, also dropped.
Some of the other amendments that Congress made included disqualifying a Qui Tam lawsuit if it was based on information already available to a government employee. These enactments stripped the False Claims Act of much of its power, and over the next few decades, few Qui Tam lawsuits were filed.
In 1986, circumstances were ripe for another evaluation of the False Claims Act. The Reagan administration has been spending heavily on Cold War efforts, and there were media reports of widespread and massive fraud against the government. That year, Congress revised the Act, and the resulting changes revitalized the law. The new amended False Claims Act provided for whistleblower recovery of between 15% and 30% of the funds recovered. It also provided for payment of whistle blower attorney fees by the defendant, and tripling of the damages recovered. Penalties on each false claim were set at between $5,000 and $10,000, and each separate fraudulent transaction is considered a separate claim. Therefore, one contractor may have committed thousands or even hundreds of thousands of separate fraudulent transactions.
Since those amendments, there has been a surge in Qui Tam litigation, as more ordinary citizen whistleblowers have come forward to bring fraud to light. Such actions by private individuals have resulted in the federal government recovering billions of misappropriated and defrauded funds. The law has remained largely unchanged since 1986, save for a few additional amendments made as part of the 2010 Patient Protection and Affordable Care Act (PPACA).
What Is the Deadline or Statute of Limitations for Filing a Qui Tam Lawsuit?
Bringing a Qui Tam claim against an individual or entity for fraud against the government can be emotionally satisfying for a relator, because it ensures that valuable government funds that can be used for the public and national good are recovered and that future frauds are discouraged. It can also be financially rewarding for a whistleblower, because he stands to receive up to 30% of the defrauded funds that are recovered. However, none of this can happen unless the Qui Tam lawsuit is filed before the deadline expires.
The deadline or statute of limitations for filing a Qui Tam claim is not the same for all types of claims, and may depend on the kind of claim that you’re bringing. Also, the Federal False Claims Act is sufficiently vague about the time limitations for filing a claim to generate doubts and confusion.
Broadly however, the Qui Tam lawsuit must be filed within the latest of the following periods: six years of the violation of the Act or three years of the time within which the material facts of the case should have been made known to the government of the United States. In addition, there is an outside deadline on those two periods of ten years. No Qui Tam claim can be filed more than 10 years after the violation of the Federal False Claims Act.
Determining which of these time frames apply to your Qui Tam claim can be challenging. If you have knowledge of defense fraud, healthcare fraud or any other fraud committed against the government, consultation with a False Claims attorney can help you understand whether you still have time to file your claim.
How Much Can It Cost to file a Qui Tam Lawsuit?
Qui Tam litigation can be an expensive affair, and whistleblowers who want to sue companies or individuals for defrauding the government, will find expenses stacking up very quickly. It’s the reason why False Claims Act attorneys offer contingency plans to encourage plaintiffs to come forward to file claims against fraudsters.
The actual costs of filing a Qui Tam lawsuit against a company, entity or individual can be high. For instance, your job as a person bringing a Qui Tam lawsuit is to provide evidence of fraud being perpetrated against the government. Toward this end, you will need to hire the services of experts in the field and establish witnesses. There will be substantial travel expenses involved. Besides, there are registration expenses, filing fees, court costs and other expenses.
Typically, your Qui Tam attorney will bear these costs for as long as he or she is representing you. All administrative and other expenses involved in litigation will be met by your attorney. Your lawyer will be reimbursed only in case of a successful whistleblower claim. Attorney’s fees after a successful Qui Tam lawsuit will involve a small percentage of the reward that you receive from the federal government in return for your whistleblower efforts. The relator’s reward is typically about 15 % to 30% of the total funds recovered. A percentage of this will go toward attorney’s fees. Any out-of-court expenses and administrative costs will be separate from the attorney’s fees.
Lawsuits under the Federal False Claims Act can be extremely complex and expensive. It’s the reason why you don’t see too many whistleblowers coming forward with evidence of fraud, and also why few lawyers devote their time and attention to Qui Tam litigation. Hiring a False Claims attorney however, can help you concentrate on building your case against the defendant, without having to worry about meeting the expenses of your lawsuit.
What Kind of Protection Can I Expect As a Whistleblower?
One of the biggest obstacles preventing people from coming forward with evidence of Qui Tam fraud perpetrated against the government, is the fear of retaliation by the agency, organization or company perpetrating the fraud. It’s important to understand that the law provides you protection against retaliation by your employer.
Soon after an individual brings a complaint alleging fraud under the Federal False Claims Act, he may find that he is submitted to a hostile environment in the workplace. However, individuals who bring claims under the Federal False Claims Act are protected against wrongful retaliation. They are also protected against any discrimination in the workplace, reduction in pay, or demotion. It isn’t just the person who brings the complaint about fraud who is regarded as a whistleblower and is eligible for protection. Any other person, who also has knowledge of the fraud and participates in the investigation, may also be regarded as eligible for protection.
If the employer engages in such practices to retaliate against an employee for bringing a suit, a whistleblower can report these actions to the federal agency that has the jurisdiction over the case. Employees are eligible for compensation for any damages that occur as a result of retaliation or discrimination in the workplace. For instance, a whistleblower may expect back pay with interest and other losses sustained as a result of the employer action against him. He may also be eligible for pain and suffering damages. However, the statute of limitations for filing a complaint against wrongful retaliation is just three years.
There isn’t one single law that includes whistleblower protections. Rather, these protections are outlined in a number of laws and statutes. For instance, the recently enacted Food Safety Modernization Act, contains strong whistleblower protections for those who bring to light food safety concerns. These employees may include workers who are involved in the manufacture, production, processing, distribution, and transportation of foods. Similar such statutes exist in other laws governing other areas of the government’s duties.