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Qui Tam Law
Qui Tam Law Definition
The federal False Claims Act is the single most important tool used to deter fraud on the federal government. In general terms, the FCA prohibits false or fraudulent claims to the government and imposes treble damages and civil penalties against any "person" breaking the law. The real power of the statute, however, lies in its unique qui tam provision which empowers private individuals with first-hand knowledge of fraud on the government to hire private counsel and sue on behalf of the United States. Such individuals are entitled to receive an award of between 15% and 30% of the government’s recovery as well as their own attorney's fees, costs, and expenses.
The term qui tam comes from the Latin phrase "he who sues on behalf of the King, as well as for himself.” In other words, the FCA is no mere fraud hotline to report unethical behavior by a government contractor – the FCA gives any person the right to file a full-blown federal lawsuit on behalf of the United States. Because qui tam relators (or whistleblowers as they are sometimes called) bring claims on behalf of the United States in Court, they must be represented by licensed counsel.
By creating incentives for individuals with first-hand information to hire private counsel and prosecute lawsuits in conjunction with the Department of Justice, the statute creates a true public-private partnership between individuals with knowledge of fraud, private practice lawyers specializing qui tam litigation, and federal prosecutors. The public private partnership created by the FCA has been an unparalleled success; since 1986 more than $40 billion has been recovered, and qui tam whistleblowers have received hundreds of millions of dollars for their efforts.
Such recoveries are by no means easy or quick. In addition to understanding the complex needs of modern government and the commercial entities servicing those needs, qui tam litigation has a number of unusual requirements not found in other types of federal civil litigation. Those requirements – many of which are jurisdictional – include a pre-filing disclosure memorandum, a heightened pleading standard for the Complaint, and a number of unusual procedural hurdles such as filing the Complaint under seal.
State governments have taken notice of the successes of the United States and to date 29 state governments and the District of Columbia have passed some form of FCA-style qui tam statute.
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