It might surprise you to know that the federal statute intended to protect whistleblowers; people who blow the whistle on individuals and companies that are defrauding the government was signed into law during the Civil War. The False Claims Act of 1863. Amendments to the original law give private parties the right to file a lawsuit on behalf of the government and receive a portion of what is recovered. These lawsuits are commonly known as qui tam cases, and the person filing the lawsuit is known as a relator.
So-called “whistleblowers” under the False Claims Act are protected from retaliation by their employers or others as a result of their actions to uncover fraudulent activities. If you are considering filing a qui tam case, there are five things you should know about them.
The right of whistleblowers to sue on behalf of the federal government
Qui tam cases encourage people with insider information about conduct that is defrauding the government to come forward with the information. Offering people the right to keep a portion of whatever is collected in a lawsuit against the party committing the fraud, is an incentive that could make a reluctant whistleblower come forward.
Typical whistleblowers and targets in qui tam cases
The targets of qui tam cases can be anyone profiting from fraudulently dealing with the federal government. For example, a doctor filing false Medicaid or Medicare claims, a defense contractor delivering inferior products to the government at exorbitant prices and companies rigging government bids by bribing public employees are examples of the types of conduct that can lead to a qui tam lawsuit.
The government can intervene in a qui tam case
A whistleblower with evidence of wrongdoing that has cheated the government out of money must file a complaint with the appropriate federal court along with a disclosure statement. The case is sealed while the Justice Department investigates the allegations made by the whistleblower and makes a decision whether the case has merit. The government may decide to intervene and assist in the lawsuit, or it might decline the chance to intervene and allow the person bringing the lawsuit to continue with it.
Benefits to the parties bringing qui tam cases
Under the False Claims Act, whistleblowers can receive from 15 to 25 percent of what is recovered from the party committing fraud against the government in qui tam cases in which the Justice Department elected to intervene. The recover for the whistleblower is 25 to 30 percent in cases in which the government declined to intervene.
Protecting whistleblowers from retaliation
While the government is investigating the case and deciding if it will intervene, the identity of the person filing the lawsuit is protected from disclosure. Once the lawsuit is released from being under seal, the law prohibits retaliation by the target of the lawsuit. This means that the whistleblower cannot be discharged from employment or subject to disciplinary action.
Qui tam cases are complex and should be discussed with an attorney who has experience handling False Claims Act cases. The guidance and representation provided by the attorney can help a whistleblower to navigate through the process.