What Is a Qui Tam Lawsuit and How Does It Work?
If you have witnessed fraud against the federal government, you may have more legal options than you realize. A qui tam lawsuit allows a private individual to sue on the government’s behalf and, if the case succeeds, collect a portion of the money recovered. Understanding how this process works is the first step toward deciding whether to act on what you know.
This article explains what a qui tam action is, how a False Claims Act lawsuit moves through the legal system, and what you should look for in a qui tam attorney before you file.
The Basics: What Is a Qui Tam Lawsuit?
“Qui tam” comes from a Latin phrase meaning roughly “he who sues on behalf of the king as well as himself.” It is the legal mechanism built into the False Claims Act (FCA) that empowers private citizens, known as "relators," to file fraud suits on behalf of the federal government.
A whistleblower lawsuit filed under the FCA targets entities that have submitted false or fraudulent claims for government funds. This most commonly involves healthcare billing fraud (such as Medicare and Medicaid upcoding or Anti-Kickback Statute violations), but the FCA applies to any contractor, company, or individual that knowingly defrauds a federal program. You can review the broader framework at False Claims Act guidance.
Key distinction:
The relator does not need to be the primary victim of the fraud. You just need direct, non-public knowledge of it. This is what separates a qui tam case from a standard civil lawsuit.
Who Can File a Qui Tam Lawsuit?
Almost any private individual with original, firsthand knowledge of fraud against the government can serve as a relator. Whistleblowers in qui tam cases often include current or former employees, contractors, subcontractors, and sometimes industry competitors who have direct knowledge of the fraudulent conduct.
There are important limitations, however:
- The First-to-File Bar (31 U.S.C. § 3730(b)(5)): The FCA bars a relator from recovering if another party has already filed a complaint based on the same underlying facts.
- The Public Disclosure Bar (31 U.S.C. § 3730(e)(4)): This rule disqualifies cases based on information already disclosed in news reports, government hearings, or public audits, unless the relator qualifies as an "original source" who provides independent and material information.
These rules make timing and careful legal preparation critical. Consulting a qui tam attorney before taking any action protects your position and your eligibility for a reward.
How a Qui Tam Lawsuit Works
Filing a qui tam lawsuit follows a defined process under federal law, and knowing what to expect at each stage helps you make informed decisions from the start.
Step 1: Consult an Attorney and Evaluate Evidence
Before anything is filed, your attorney evaluates your evidence and assesses whether your case meets the threshold for a viable False Claims Act lawsuit under Federal Rule of Civil Procedure 9(b) (which requires pleading fraud with particular specificity). This includes reviewing the strength of your firsthand knowledge, the type of fraud involved, and any potential legal obstacles.
Step 2: File Under Seal
The complaint in a qui tam lawsuit is filed in federal district court under seal (31 U.S.C. § 3730(b)(2)). This means the defendant is not notified and the public cannot access the court docket while the government conducts its investigation. While the statute specifies an initial 60-day seal period, the Department of Justice routinely requests extensions, meaning the seal period often lasts several months to a few years while federal agents investigate.
Step 3: Government Investigation
The Department of Justice, working alongside Assistant U.S. Attorneys (AUSAs) and federal agency investigators (such as HHS-OIG or DCIS), reviews the complaint and investigates the allegations. During this phase, your attorney communicates with DOJ investigators and works to present evidence clearly. The government may request additional evidence, interview witnesses, or issue Civil Investigative Demands (CIDs).
Step 4: Intervention or Declination
After completing its investigation, the government makes an intervention decision (31 U.S.C. § 3730(b)(4)):
- Intervention: The government takes over primary prosecution of the case. Government intervention significantly improves the likelihood of a favorable resolution and typically yields larger recoveries.
- Declination: The government declines to enter the suit. The relator still retains the legal right to pursue the lawsuit independently with private counsel.
Step 5: Settlement or Trial
The majority of FCA cases resolve through settlement negotiations before trial. The relator’s share of the recovery ranges from 15% to 25% if the government intervened, and 25% to 30% if the relator pursued a declined case independently (31 U.S.C. § 3730(d)).
What Can Be Recovered in a Qui Tam Case?
The FCA provides for treble damages (three times the actual financial loss suffered by the government), plus mandatory civil statutory penalties for each individual false claim submitted (adjusted annually for inflation under the Federal Civil Penalties Inflation Adjustment Act).
In healthcare and defense contracting cases involving long-standing billing practices, these recoveries can reach millions of dollars. The relator receives between 15 and 30 percent of the total recovery. Reviewing the details of qui tam litigation will give you a clearer picture of what a case like yours might involve.
How The McCabe Law Firm Approaches Qui Tam Representation
The McCabe Law Firm has focused on False Claims Act and qui tam litigation for nearly a decade. That focus means the firm understands how government prosecutors and federal investigators evaluate claims, what evidence is most persuasive at each stage, and how to structure a complaint that holds up under scrutiny.
If you have witnessed fraud against a federal program and are considering whether to act, the right time to speak with a qui tam attorney is before you file, before you notify your employer, and before you discuss the matter with anyone outside of legal counsel. You can reach out through whistleblower representation to request a confidential case evaluation. You can also review additional whistleblower legal insights to better understand your options.
Speak With a Qui Tam Attorney
If you have insider knowledge of potential fraud involving government funds, it is important to understand your legal options before taking action. Qui tam matters are procedurally complex, and the government’s decision to intervene or decline a case affects how the litigation proceeds.
The McCabe Law Firm offers confidential case evaluations for individuals considering whistleblower claims under the False Claims Act. Our team has extensive experience representing whistleblowers in a wide range of cases involving private entities, government contractors, healthcare providers, and other organizations that receive federal funding.
We can help assess whether your evidence supports a potential claim, explain applicable whistleblower protection provisions under 31 U.S.C. § 3730(h), and provide clear guidance through every stage of the qui tam process.
Contact The McCabe Law Firm to discuss your situation confidentially with a qui tam attorney.
Frequently Asked Questions
What is the False Claims Act, and how does it relate to a qui tam lawsuit?
The False Claims Act is a federal statute that enables private individuals (relators) to report fraud against government programs and file lawsuits on the government's behalf. "Qui tam" refers specifically to the statutory provision under 31 U.S.C. § 3730(b) that grants private citizens the right to initiate these actions and share in any financial recovery.
How does the federal government become involved in a qui tam action?
After a qui tam complaint is filed under seal in federal court, the Department of Justice and local Assistant U.S. Attorneys evaluate the supporting evidence. The government may intervene to take over primary responsibility for the lawsuit or decline intervention, allowing the whistleblower to proceed independently.
What types of false claims can lead to a qui tam lawsuit?
False claims arise across many industries receiving government funds, including Medicare/Medicaid billing fraud, defense contractor procurement fraud, grant fraud, defective pricing, off-label pharmaceutical marketing, and false certifications of regulatory compliance.
What is a qui tam complaint?
A qui tam complaint is the formal legal document filed by a whistleblower (relator) in federal district court to initiate an FCA suit. It is served on the U.S. Attorney General and local U.S. Attorney while remaining under seal from the public and the defendant.
What does qui tam law allow whistleblowers to do?
Qui tam provisions allow private citizens with direct knowledge of fraud against federal or state governments to file lawsuits on the government's behalf and receive between 15% and 30% of the total financial recovery.
Can procurement fraud result in a False Claims Act case?
Yes. Procurement fraud occurs when government contractors submit false invoices, misrepresent product specifications, engage in bid-rigging, or fail to comply with contract terms while billing federal agencies.
How are defense contractor fraud cases handled under the False Claims Act?
Defense contractor fraud cases involve overbilling, material substitution, defective military hardware, or false testing certifications. These cases follow standard FCA qui tam procedures under seal, often working alongside investigators from the Department of Defense Inspector General (DoD-IG) or DCIS.
Why is extensive experience important when selecting an attorney for a qui tam lawsuit?
Qui tam litigation involves strict procedural rules, seal requirements, first-to-file constraints, and coordination with federal prosecutors. Working with experienced FCA counsel at The McCabe Law Firm ensures your complaint is properly structured to withstand government scrutiny and protect your rights.
