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What is Qui Tam?

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Qui tam is an important Latin phrase for anyone to learn. It is an abbreviation of a longer Latin phrase, which roughly translates to “who as well for the king as for himself sues in this matter.”*

More generally, qui tam has come to stand for the parts of several laws which allow individuals to sue on behalf of the government. It is a special kind of law, because usually individuals do not have standing to represent the government. However, qui tam provisions have been made part of laws to allow individuals to file claims for fraud against the government. Qui tam provisions are rare even in whistleblower reward law. They are not part of the Securities and Exchange Commission whistleblower program or CFTC or IRS whistleblower laws, even though whistleblowers can file information with those agencies and obtain a reward. It is an added right that is part of the State and Federal False Claims Acts to bring an underlying case of fraud into court.

Federal and State laws

Since the 1986 amendments, which re-established the federal False Claims Act, many states have also established their own False Claims Acts. Most of the state laws are modeled on the Federal False Claims Act. There are some technical differences in these laws. A major split is between the state False Claims Acts which allow for virtually any kind of fraud to be the subject of a qui tam case (similar to federal law) and those states which basically only allow for recovery of Medicaid funds.

The following states have False Claims Act laws which allow a whistleblower to sue for virtually any kind of fraud committed against that state: California, Delaware, District of Columbia, Delaware, Florida, Hawaii, Illinois, Indiana, Massachusetts Minnesota, Montana, Nevada New Jersey New Mexico, New York, North Carolina, Oklahoma, Rhode Island, Tennessee, and Virginia. States with False Claims Act laws more limited to state health care programs or Medicaid fraud cases include: Colorado, Connecticut, Georgia, Iowa, Louisiana, Maryland, Michigan, Texas, and Washington.

The laws are evolving and in many cases getting stronger. Additional jurisdictions have added similar laws including Chicago and New York City and these laws are changing and evolving. A whistleblower with a case should check with an attorney to see if it involves federal or state False Claims law, or perhaps both and re-check incase there have been any changes to these laws which postdate this information. Depending on the facts of the fraud case involved, it may be possible to sue under federal and under a particular state law at the same time.

Contractors

Many claims filed under a qui tam case involve health care companies and military contractors. However, almost any agency of the government could be funding a contractor or a project, which can, in turn, be the subject of a qui tam action.

Statute of Limitations

Under the Federal False Claims Act the statute of limitations or timeline for filing a lawsuit is usually six years. The statute of limitations for suing for whistleblower retaliation under this law is generally three years.

However, there is also a first to file rule. This rule was enacted to encourage whistleblowers with strong information to file the case quickly. This means that usually the first person who files a case is the only one who can earn a share of the government’s recovery. Therefore, anyone considering filing a lawsuit should contact lawyer sooner rather than later to determine if they have a strong case and learn more about their rights. An in-depth knowledge of the law is a must when fighting for client rights in the courtroom. Our attorneys at the firm have the experience needed to ensure our clients’ rights are protected.

Reporting Misconduct

The person who reports the misconduct through a False Claims Act case can receive a large monetary reward for reporting fraudulent activities. Such a person can also sue for retaliation if in reporting misconduct involving fraud against the government that person has been the subject of retaliation at work.

It is important to keep in mind that both the government and society as a whole also benefit from successful qui tam lawsuits. That is why the False Claims Act was created. It provides incentives to fight fraud against the government. Hopefully, filing such a case will help deter fraudulent behavior from continuing. In any event, the first thing anyone contemplating such a suit should do is contact an attorney to determine if they have a strong case, and how their rights can be protected.

Laws to Protect Whistleblowers

The False Claims Act provides whistleblowers with some rights. An employer faces penalties if they retaliate against the person who reported the misconduct by firing, demoting, harassing, or threatening the person.

If an employer does retaliate against a person who files a qui tam lawsuit, and the whistleblower wins the suit, that person is entitled to re-instatement as well as two times back pay and interest on the back pay as well as special damages. Reporting fraud committed against the government is a huge commitment. The drafters of the False Claims Act intended that the law create commensurate rewards.

Defining Qui Tam Action

qui tam action is a case filed by an individual on behalf of the government. The idea is to encourage people with information about fraud to come forward with the crucial information the government needs to make a recovery. That encouragement comes in the form of a share of the government recovery.

Many different kinds of qui tam actions are allowed under the Federal False Claims Act and state False Claims Acts. There are also special provisions to file with the IRS so that agency can investigate and recover money related to major tax fraud and to file financial fraud actions through the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Both the SEC and the CFTC have recently created whistleblower’s offices and procedures for this purpose pursuant to the Dodd/Frank financial reform legislation.

The most common of these actions are those filed under the federal False Claims Act, but as more and more states enact similar laws and as more people hear about the other kinds of whistleblower actions which can be taken, more and more cases are likely to be filed in every jurisdiction and through every agency which supports the concept.

Initiating a Fraud Case

A whistleblower can be any individual who reveals misconduct by an employer, a business, or another individual. By filing an action to report fraud against the government, a whistleblower can start a qui tam case.

The process of filing a case is complicated and requires legal analysis. Many qui tam cases involve complex business practices pursued over a long period of time. It takes experience to navigate the law as well as those complex facts. It can take persistence to determine what information is valuable to the government. When the case can be made, the False Claims Act allows a whistleblower to file a qui tam lawsuit and receive a share of any recovery the government obtains. Any person or company, public or private that violates the False Claims Act can become a defendant of a qui tam lawsuit.

Billions of dollars have been recovered by the government thanks to qui tam lawsuits. Individual Whistleblowers have also been awarded millions of dollars as a result of their role in fighting fraud under these lawsuits. Of course, not every case is successful. The decision to file a whistleblower case must be handled with care and discussed carefully with counsel as a result.

Filing by the Government

The government can file its own case under the False Claims Act if it chooses and it can choose to join the case filed by an individual. However, the idea behind qui tam provisions of the False Claims Act is to encourage individuals with information about fraud to help the government. Individuals may have crucial information the government would never otherwise learn about and this law provides incentives for those special individuals to help.

Expense Responsibilities

Qui tam suits are usually filed on a contingent fee basis. In this way, the lawyer will obtain fees as part of a successful recovery. The status of the litigation, whether the government intervenes in the case, and whether the whistleblower wants to pursue the case absent government action, all can affect the progress of the case.

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