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whistleblower provision of the false claims act

whistleblower provision of the false claims actThe qui tam or whistleblower provision of the False Claims Act is probably its most important provision. This is because it protects whistleblowers from retaliation for reporting fraud. It also provides a financial incentive to report the fraud and assist the government in its investigation.

Whistleblower Provision of the False Claims Act:  Protection

When someone decides to be a whistleblower, they are taking a huge risk. While it’s true there is the potential for a financial reward for a person who helps collect damages from a company that has defrauded the United States government, the financial reward is never guaranteed. In addition, the reward is often not as large as most whistleblowers hope it will be.

To be eligible for a reward, the whistleblower can’t just send an anonymous e-mail saying “my company overbilled the US government a few million bucks last year” and expect to collect a reward. The whistleblower must provide detailed information about who did what, what they did, when they did it, and how much they allegedly stole from the government. Then the whistleblower will need to provide documents that support these allegations and claims. And they’re often going to have to cooperate with the federal government in its investigation.

The whistleblower will need to provide a lot of information and do so as carefully as possible, assuming they want to keep their identity a secret. But this is difficult to do, since the business or organization allegedly defrauding the government will find out who the whistleblower is when the lawsuit is in full swing.

So what does this all mean? It means if the whistleblower does what’s required, they can expect retaliation. From a pay cut and demotion to firing, harassment or even blacklisting, anything is possible. The False Claims Act recognizes this and prohibits employers from retaliating against employees who act as whistleblowers. If retaliation takes place, the whistleblower may recover full reinstatement at their job, double the pay they would have received, interest, attorney’s fees and special damages.

Whistleblower Provision of the False Claims Act:  Rewards

The reward, bounty, payoff or whatever you want to call it – this is what makes the qui tam provision in the False Claims Act so effective. According to Taxpayers Against Fraud, about 80% of all fraud cases under the False Claims Act came to light because an individual blew the whistle on the fraud that was taking place.

Without the financial incentive, many individuals would not take the risk of becoming a whistleblower. It’s nice to think most of us would do the right thing when we see something improper occurring, but having to face the retaliation that is likely to occur would keep most potential whistleblowers quiet.

So what’s the whistleblower going to get? The whistleblower could receive between 15% and 30% of the damages recovered by the government in a qui tam action. More specifically, if the whistleblower gets the government involved in the lawsuit, they can expect between 15% and 25%. If the whistleblower pursues the case on their own, without government help, they can get between 25% and 30%. In some cases, the whistleblower may only get 10%. Additionally, the whistleblower may recover attorney’s fees from the defendant.

Whistleblower Provision of the False Claims Act:  Procedural

When a whistleblower decides to file a qui tam lawsuit, the common steps of starting a lawsuit change. For example, when filing the complaint, it’s done so in secret, so neither the defendant nor the public is aware a lawsuit has begun. Along with the complaint, the whistleblower will need to provide the government with a statement of all notable evidence they have to support the allegations of fraud.

Then the government will have at least 60 days to investigate the potential fraud; during this time, no one knows about the lawsuit. However, the government usually gets extensions that will allow them months or years to finish the investigation.

After the government completes its investigation, it will decide if it will take over the case (known as “intervening” in the legal world), with the whistleblower providing assistance when needed. Or the government will decide not take over the case and let the whistleblower continue the lawsuit without government help. Generally speaking, if the government decides not to intervene, the chances of successfully recovering under a qui tam action are greatly diminished.

There are two important things potential whistleblowers need to keep in mind. First, they can’t recover a reward unless they’re the first whistleblower to file the qui tam lawsuit. If someone else brings the lawsuit first, the second whistleblower is out of luck. Second, the whistleblower must bring the lawsuit within six years of the date the alleged fraud took place. This means there is a six-year statute of limitations on qui tam lawsuits.

Thinking about Filing a Qui Tam Lawsuit?

As you can see, starting a lawsuit under the False Claims Act is very complex and requires a lot of work. It’s practically impossible for someone to try to take on this lawsuit on their own without experienced legal help. For more information about a particular whistleblower provision of the False Claims Act, please contact the skilled attorneys at Bothwell Law Group by calling 770-643-1606 today.

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