What You Should Know About Qui Tam
Qui Tam is a legal term that refers to the mechanism in the federal False Claims Act. By making use of Qui Tam provisions, a person can sue an individual, group or organization on behalf of the United States government for committing a fraud against various federal programs. The government may or may not intervene in such cases. A private plaintiff may bring about a Qui Tam action on behalf of the government on his own (but the with the help of an attorney). Below you will find the most important facts related to Qui Tam:
- If the same case if filed by more than one qui tam plaintiff, not all of them may remain in the case. Not many people are aware of the fact that the False Claims Act operates on a first in time and first in right statute. However, there are cases where the second to file has more detailed information and evidence concerning the fraud and they can also stay in the case. The qui tam action may also be barred when a plaintiff files the case in sequence to a civil case that has already been filed by the government.
- While 'first to file' rule might appear as a limitation to some people, it has actually prompted a large number of people to promptly report a case of fraud. The risk associated with this rule may vary depending upon the situation. For example, if you are planning to report an industry-wide fraudulent activity, there is a good chance that someone has already filed a broader case against everyone in the concerned industry.
- Cases falling under the category of False Claims Act qui tam cannot be based on information that has been disclosed publically. In other words, the law encourages people with sufficient insider information to go ahead and report a fraudulent activity to the government. Information available in the public domain cannot be utilized by a plaintiff to make a claim.
- Chances of winning the case are higher when the government joins in. The Department of Justice receives a copy of the complaint as well as a disclosure statement right after a qui tam complaint is filed by a plaintiff in court. The disclosure statement mentions all facts and material evidence supporting the complaint. In the next stage, the government orders an investigation into the matter. In some cases, it may take several years to complete investigations. After the completion of investigations, the government decides whether or not to join the plaintiff. The qui tam plaintiff can simply dismiss the case under consideration or go it alone.
- Cases filed under the False Claims Act qui tam provision continue to remain sealed for a long duration. In the beginning, qui tam cases are not directly served on the defendant. They are filed in a federal court in confidence. The main objective of filing the case in confidence is to let the government have the liberty of investigating the complaint without giving any clue to the defendant in the case. Usually, the statutory period for keeping a case in confidence or under seal is sixty days. However, the government may ask the federal court for extended time. Cases involving criminal conduct along with normal civil violations may remain sealed for several years.
- You cannot file a case under the False Claims Act against certain states, but many states do have a provision for filing. These types of cases can also be filed against municipalities and local governments.
- In most cases, a qui tam reward of about 15 to 25 percent is provided to the plaintiff if the government joins in after completing its own investigation. If the plaintiff continued to pursue the case despite no intervention from the government, he is entitled to a 25-30 percent reward. In some specific conditions, a plaintiff may get a lesser reward as well.
- The court has the power to reduce or cancel the reward of a plaintiff who actually planned the fraud.
