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How a False Claims Settlement Makes Its Way Through the Courts

Getting a False Claims settlement is nice, but it often requires going through the court system.

False Claims SettlementThe False Claims Act is a powerful tool to stop fraud, but getting a False Claims settlement as a relator can be a very lengthy and involved process. This settlement usually comes as a result of someone going through the qui tam process. The purpose of this blog post is to explain what a qui tam case is and the major steps involved.

What Is a Qui Tam Action?

A qui tam action is a type of civil lawsuit where a relator (who is the whistleblower) sues someone or an organization that commits fraud against the federal government. The relator brings this lawsuit on behalf of the government and in return is eligible to receive a monetary award. This award varies but can range from anywhere from 15 percent to 30 percent of the money they can help recover. The exact percentage depends on how much work they provide in recovering the money for the federal government.

This percentage will drop if the relator takes part in the fraud. It might seem unfair that someone committing fraud can profit from it, but it is better that the federal government gets 85 cents on the dollar rather than zero cents on the dollar.

Getting an Attorney

If a whistleblower wants to become a relator, they must hire an attorney. This seems a bit odd since a criminal defendant facing decades behind bars can choose to represent themselves at the criminal trial. But the difference here is that in a qui tam action, the whistleblower is a relator, which means they bring a lawsuit on behalf of the federal government. Because it’s ultimately the federal government’s lawsuit, they decide on whether they want an attorney – and they always have an attorney.

So to bring a qui tam lawsuit as a relator, an individual must hire an attorney. The individual needs to hire a lawyer who has experience and knowledge in qui tam lawsuits. They are unlike any other civil or criminal court case, so a prospective relator doesn’t want an attorney to learn as the case goes along. They need experience right out of the gate.

Starting the Qui Tam Action

The qui tam lawsuit process officially begins when the relator files a complaint in federal court. The one unique thing about this complaint is that it is “under seal,” which means in secret. This means the defendant in the case has no idea it is now the defendant in a lawsuit. This secrecy is essential to prevent the defendant from hiding or destroying evidence or fleeing the country. It also helps protect the relator from potential retaliation because it allows them to stay anonymous.

Besides filing the complaint, the relator’s attorney will prepare a special memo for the United States Department of Justice explaining the fraud, as well as the evidence the relator has in support of the qui tam case.

The Federal Government’s Investigation

While the qui tam lawsuit is under seal, the Department of Justice will conduct its own investigation of the fraud. The Department of Justice initially has 60 days to complete its investigation. But since this is rarely enough time, they can easily get an extension. In most cases, it takes over 15 months for the DOJ to finish its investigation. Once the investigation is finally over, the Department of Justice will decide whether it will join the relator in the qui tam lawsuit.

The Federal Government’s Decision

The decision for the DOJ to join, or not join, can make or break the qui tam lawsuit. If the Department of Justice decides to join, it will litigate the case along with the relator. But if they choose not to participate, the relator may still proceed with his or her qui tam lawsuit.

If the Department of Justice decides to join the qui tam case, it can drastically increase the chances of success. One reason is due to the fact the DOJ has the resources of the entire federal government behind it. And there is a lot more money in Washington, DC than in any one person’s bank account.

If the Department of Justice decides not to join, that can create a problem because the relator loses out on two things. First, they no longer have the resources of the government to help them in the qui tam lawsuit. Second, it can embolden the defendant and encourage them to fight harder and not settle the case. This is because the Department of Justice will usually only decline to join when they think the case will lose.

One silver lining to the Department of Justice backing out is that if the relator wins the qui tam case, they are much more likely to receive a higher percentage of the money recovered for the federal government.

Qui Tam Litigation Takes Place

Now the case can proceed mostly like any other civil case. The defendant will receive a copy of the complaint. Discovery will take place. Then there is the trial. If the qui tam action settles, it will usually be during the litigation process and before the trial begins.

Interested in Speaking with a False Claims Act Attorney?

Click to find out more about a False Claims settlement by contacting our legal team at Bothwell Law Group online.