Are you searching for information to learn more about a qui tam lawsuit? It’s a rather complicated legal topic, but we will do our best to break it down for you in layman’s terms. Keep reading for the details you need to know if you are considering or involved in a qui tam lawsuit.
Under the False Claims Act, the qui tam law allows a private party to bring a claim against another party for false billing to the federal government or for withholding information resulting in a higher cost to the federal government.
Qui Tam Lawsuit: When to Litigate
The federal government always retains the right to take on a false claims case and pursue it first. However, where the Department of Justice decides that a case is not a priority to pursue, then the reporting party can bring a lawsuit at his cost and charge the false claim defendant in federal civil court.
If the reporting party wins the case, he would then be eligible to between 15 and 25 percent of the total recoveries due to the federal government. While this may sound like a small amount, it’s frequently the case that the erroneous cost amount covers multiple years and hundreds of billings.
Qui Tam Is Not Necessarily Whistleblower Protection
The qui tam provision of the False Claims Act is frequently confused with being a whistleblower protection clause, but they are not the same. Whistleblower protections help ensure a reporting party is not unfairly retaliated against in their career or life from reporting. The qui tam provision, however, provides whistleblowers with the ability to carry out a lawsuit penalizing a wrongdoing defendant. The protection law is related, but separate.
The basis of the qui tam lawsuit option started as far back as 1899 under an obscure law known as the House Refuse Act. However, under British common law, the concept was in play up to four centuries earlier. The early U.S. law was one of the first allowing lawsuits by private parties to enforce the provisions of the related federal law.
Qui Tam Lawsuit Options and Benefits
The benefit of the Qui Tam option is twofold. First, it allows the Department of Justice civil branch to prioritize its cases without completely missing the opportunity to pursue a matter of concern. Often a report may seem to be serious, but the evidence is insufficient for the federal government to pursue.
Another possibility is that the Department of Justice branch is overwhelmed and focused on much bigger cases already, being unable to spare resources for the latest report. The Qui Tam option allows the reporting party to pursue the matter in court to the benefit of the federal government. This keeps the issue alive and ensures that a wrongdoing party still ends up being held responsible. It also works as an active deterrent to intentional financial wrongdoing.
From the defending company perspective, the Qui Tam option is a dual exposure for liability. Again, either the Department of Justice or the reporting party can sue the company. Both options can result in significant damages if wrongdoing is proven and confirmed in court. And similar to other false claims charges, how a company responds when incorrect actions or wrongdoing are identified makes a big difference in the outcomes legally.
The qui tam lawsuit is a serious step and should be handled with sensitivity. To better understand how to proceed in a quit tam lawsuit, contact our team at Bothwell Law Group.