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How Does a Qui Tam Lawsuit Work?

How Does a Qui Tam Lawsuit Work

How Does a Qui Tam Lawsuit WorkQui tam lawsuits work by rewarding a whistleblower who sues a person or organization that is defrauding the US government. Since the government is unaware of most of the fraud taking place against it, it relies on whistleblowers to bring the fraud to the government’s attention. One way this occurs is when the whistleblower sues the wrongdoer on the government’s behalf. In return for doing this, the whistleblower gets a portion of the money recovered by the US government.

How Does a Qui Tam Lawsuit Work:  Background

Qui tam lawsuits fall under the False Claims Act. The False Claims Act is an old law, dating all the back to the Civil War. Back then, various contractors were defrauding the Union (and Confederate) government by selling war goods that were faulty, inadequate or otherwise unfit for use. To counter this problem, Congress passed the False Claims Act, which created liability on those who would defraud the government.

As a way of making the False Claims Act more effective, Congress added a qui tam provision. This allows individuals to collect a reward if they help the US government recover money taken through fraud. This “bounty” sounds like a good idea, but how exactly does the process work?

How Does a Qui Tam Lawsuit Work:  The Beginning

To start a qui tam lawsuit, there must be a whistleblower (also called a relator). A relator is someone who has knowledge of the fraud and can use that knowledge to sue (or help the US government sue) the person or organization who is defrauding the government. The government relies on relators because the government is unaware of most of the fraud that takes place. Additionally, even if the government suspects possible fraud, it won’t have anywhere near the knowledge or access to information that someone inside the defrauding organization would have.

Once someone decides to be a whistleblower, they must file a complaint in federal court, just as they would in a normal civil lawsuit. But what makes the qui tam lawsuit different is that the relator must file the complaint “under seal.” This means the whistleblower cannot reveal the qui tam lawsuit to the defendants or the general public. Instead of notifying the defendant, the relator will notify the relevant US Attorney and Attorney General of the United States by providing them with a copy of the complaint.

The next step involves the government investigating the alleged fraud. This can take many months. While this investigation takes place, the qui tam complaint will remain under seal. The US government will complete its investigation and conclude whether to “intervene” or join the lawsuit. Even if the government decides not to intervene, the relator can still continue the lawsuit. However, it makes the chances of success much less likely. This is for a couple of primary reasons:

First, the relator can’t rely on the resources of the United States to pursue the qui tam lawsuit. If the defendant is a powerful and wealthy corporation, it might be able to force the relator into giving up on the case, regardless of how much merit it has.

Second, if the US government decides not to join the case, it probably means it believes there’s not a good chance of winning. The defendant knows this, so if it sees the government backing out, it knows the relator doesn’t have a strong case.

Whether the US government joins or not, the case can continue with the relator setting out to prove that fraud has taken place.

How Does a Quit Tam Lawsuit Work:  Potential Reward for the Whistleblower

Assuming the qui tam lawsuit is successful, the relator may recover a certain percentage of the total amount of money recovered by the government. The percentage will vary depending on the facts of the case, whether the government intervened and if so, how much assistance the relator provided during the case. Typically, the relator can expect a reward of between 10% and 30% of the total recovery. The higher 25% to 30% amount is usually for relators who win cases the US government refused to join.

How Does a Qui Tam Lawsuit Work:  Whistleblowing Risks

The idea of collecting a sizeable reward entices many people to become whistleblowers. But to see a case all the way through to completion takes a lot of time, hard work and risk. For example, when the relator files the qui tam lawsuit, they have some level of anonymity, but many organizations can eventually figure out who the whistleblower might be if they go digging. Even if the anonymity remains at the beginning of the case, the person’s name usually comes out during the trial. And in the rare cases where it does not, the anonymity vanishes when the person collects their reward.

All this means the relator is at risk of retribution and retaliation. The False Claims Act has special provisions to prevent this, but it’s difficult to prove retaliation. Much of it is very subtle and underhanded. A whistleblower can possibly become blackballed after filing a qui tam lawsuit, resulting in the inability to find work in their chosen industry or field – but it can be impossible to prove who did it.

Interested in Getting an Award under the False Claims Act?

If you’d like to learn more about how does a qui tam lawsuit work, please contact Bothwell Law Group by calling 770.643.1606 today.

What You Need to Know About the Laws That Protect Whistleblowers Before You Take Any Action

Laws That Protect Whistleblowers

Laws That Protect WhistleblowersIf you’re Googling “laws that protect whistleblowers,” chances are good you’ve encountered something not quite right where you work. If you’re wondering whether or not you should do something about it, you’ve taken the right first step: finding out more about what legal protections you have.

The False Claims Act lays out some very explicit protections against retaliation, as well as remediation for parties wronged as a result of filing suit. However, enforcement is not universal, and the very specificity of the laws can leave a lot of other gray areas in which you might be at risk. Here’s a quick overview of what they do (and do not) cover.

False Claims Act Anti-Retaliation Provisions

In general, the FCA statute makes it illegal to retaliate against whistleblowers and individuals who have opposed illegal activities. Specifically, it prevents an employee from being:

  • Fired
  • Demoted
  • Suspended
  • Harassed
  • Discriminated against
  • Threatened with any or all of the above

To file suit under the retaliation provision, an employee must prove two things:

  • He/she engaged in a protected activity (i.e. whistleblowing)
  • He/she was discriminated against in one of the manners above as a result of the same protected activity

Anti-Retaliation Remediation

In general, these are designed to “make the employee whole” as it were. This can include reinstatement (at the same level or status obtained previously); double the amount of back pay and interest owed on back pay; and additional special damages resulting from the discrimination. As part of the damages, you can include all court and attorney fees, as well as additional compensation for duress, suffering and so forth.

Unfortunately, the law around this is not universal, and can be subsumed by state-level legislation that covers the same topic. This variability includes the timeline for filing a retaliation lawsuit. The statute of limitations will depend on the content and provisions contained in a given state’s closest legal equivalent.

What Isn’t Covered Under the Anti-Retaliation Provision

While these protections are all well and good, there are other social and industry ramifications you can sometimes experience. For example, if the lawsuit leads a company to shutter an entire division, or even close their business doors for good, the people who are out of a job might lay the blame at your feet. It’s not fair, but you are likely to lose friends and acquaintances during the process.

Another example is especially appropriate in the defense industry. Because it’s a small, contained group of individuals, most people tend to know one another, and word can travel fast. You may earn an unwarranted reputation as a high-risk hire, making it very difficult for you to get another job within the industry. It’s almost impossible to prove, and yet very likely to occur.

Looking for More Information on Whistleblower Protections?

Find out what you need to know about the laws that protect whistleblowers by calling 770.643.1606.

What Is Whistleblowing and What Are the Risks?

what is whistleblowing

what is whistleblowingIf you’ve been asking, “ What is whistleblowing? ” here’s the definition straight from Merriam-Webster: An informant who exposes wrongdoing within an organization in the hope of stopping it.

At a high level, this seems straightforward; a moral obligation even. But before you go forward with a qui tam lawsuit (aka- whistleblower lawsuit), it’s a good idea to understand your legal protections, and their limitations.

Anti-Retaliation Protection

Within the False Claims Act is a specific anti-retaliation clause that (in theory) protects potential whistleblowers from employer retaliation “because of lawful acts done by the employee…in furtherance of an action.” This includes protection from being fired, suspended, demoted, or otherwise harassed, and applies whether or not a lawsuit has actually been filed.

However, to avail yourself of this clause, the employee must prove the action taken was a result of an employee participating in an FCA action, that the employer knew about the action, and the employer then discriminated against the employee as a result. If you can prove retaliatory discrimination or other adverse action, your employer is liable for damages. They must also reinstate you, and return your employment conditions to their original state.

Other Items to Consider If You’re a Whistleblower

While legal protection is helpful, there are other ramifications you may want to consider when determining whether or not to bring a qui tam lawsuit.

  1. You can still lose your job. Yes, you are protected by the anti-retaliatory provision. But you’ll have to take that case to court, and win, based on proof. Sometimes employers can successfully fire an employee for an unrelated, but justified cause. It can be as simple as stealing a pen which, in theory, is company property.
  2. You’re blacklisted. While most prospective employers should be thankful you’re honest, it doesn’t always work out that way. Even companies with nothing to hide may be reluctant to hire you, which can make it quite difficult to secure an equal job in the future. If you’re in a well-connected industry, such as defense contracting, this can be especially difficult.
  3. You may face legal consequences. If you were an active participant in the original crime, you may be found liable for any criminal charges filed after the lawsuit. True, you may receive a lighter sentence; but if you think you’re likely to face punishment as a key piece of the fraud being perpetrated you’ll have to factor it in to your decision.
  4. You potentially violate professional and contractual obligations. While the impact isn’t strictly legal, you could still face a civil suit or stiff fines. Non-disclosure and secrecy agreements can be quite binding, especially in industries that rely on confidentiality (i.e. defense contractors).

All of these are potential items to consider when deciding whether or not to file a qui tam lawsuit against a defense contractor or healthcare provider. When weighing the pros and cons, it’s best to engage legal counsel who can talk you through your risk of exposure, impacts, and potential mitigation strategies you have available.

Looking for Experienced Legal Counsel before Making a Decision?

Contact Bothwell Law Group today. Get a better understanding of what whistleblowing is, and identify any potential consequences by calling 770.643.1606.