FREQUENTLY ASKED QUESTIONS

"Qui tam pro domino rege quam pro se imposo sequitur" means "who brings the action as well for the king as for himself".

~ U.S. v. St. Luke's Episcopal Hosp, et al. , 982 F. Supp. 1261, 1262 (S.D.Tex. 1997)].

 

Qui tam cases derive from the false claims act found at 31 USC §§ 3729-3733 for federal claims.

 

Several states have enacted full qui tam state legislation which mirrors the federal false claims act in scope, enforcement and prosecution. Regarding false health care claims only several other states have enacted qui tam provisions that authorize qui tam enforcement limited to health care fraud, while other states have enacted so called "false claims acts" that are essentially anti-fraud statutes that in substance do not authorize qui tam enforcement.

 

Simply stated, when a person makes a false claim for payment or approval to the United States and/or state government, the false claims act is triggered.

 

A person may essentially be any individual or entity, public or private.

 

Qui Tam defendants are typically large corporations with deep pockets and the frauds committed are generally in the form of complicated transactions related to various government contracts, such as in the Medicare/Medicaid Programs, government purchasing, construction, disaster relief funding, federal housing, research grants and in many other federal and state funded programs.

 

There is even a growing number of cases related to corporations that sell warranted products to the government that contain known defects.

 

A Qui Tam Plaintiff or Relator is a person who discovers facts that constitute a fraud perpetrated against the government that also violates the false claims act.

 

The Relator may bring these facts to an attorney that specializes in qui tam litigation, who can then assess the merits of the case, initiate or complete an investigation as necessary, accumulate the evidence that details the fraud and then file a Qui Tam Complaint for the government and the Relator. In some factual scenarios there may be a federal case, a state case and a class action suit based upon the same set of facts.

 

Once the Qui Tam Complaint is filed under seal the government is given a reasonable time to investigate the allegations. This can range anywhere from 60 days to well over a year, depending on the complexity of the case, where it is filed and innumerable other variables.

 

Thereafter, the overnment may choose to intervene in the case, thereby taking the case over, to hand the case back to the filing attorney to prosecute or may move to dismiss the complaint, which sometimes happens. In an increasing number of cases however, the government has made motions for a ‘partial lifting' of the seal on the Qui Tam Complaint, which has effectively allowed the government to approach a putative defendant with the Qui Tam Complaint prior to officially serving the defendant with the Complaint — and prior to making a decision whether or not to intervene in the case.

 

This approach is generally not favored by Qui Tam Plaintiffs, because it invariably weakens Plaintiff's position and gives defendant pre-suit time to react to allegations of the fraud. It also gives the defendant time to convince the government not to intervene in the case.

 

If the claim is ultimately successful in some fashion the Plaintiff shares in a percentage of the recovery commensurate with their participation and commitment in the case and other variables. This percentage is normally between 15% and 30% of the recovery or settlement. The statutes provide for treble damages, plus attorney's fees and costs which are all viable contingent fee considerations.

 

When the government intervenes in a filed qui tam case, it pays for all the costs of investigation and prosecution of the case. This sometimes involves millions of dollars. When the government does not intervene in a case, the Relator and/or filing attorney(s) who are willing to advance costs are responsible for funding prosecution of the case. These costs generally reach into the tens of thousands of dollars.

 

In many instances the government's decision not to intervene results in the case being dismissed by the Relator due to funding considerations.

 

Historically the government has only intervened in approximately 22% of all filed Qui Tam cases. This is partially due to the fact that many bad cases get filed that never should have been filed. Upwards of 96% of all Qui Tam recoveries made were made in those cases where the government chose to intervene.

 

Simply put, you want the government to intervene in your case! Statistically one's chances of ultimate success are greatly improved. The government's decision to intervene in a qui tam action is viewed by all as indication that it is a quality case.

 

Conversely, the government's decision not to intervene is generally perceived to indicate some underlying problem with the case, since the government is the real party in interest in the lawsuit.

 

Prior to unsealing a filed qui tam complaint for service on the defendant(s) named therein, costs expended up to that point aside, there is little risk associated with that false claims act litigation, with the exception of wasting one's time with the initial investigation, attorney's hours expended drafting the complaint, and disclosure materials.

 

Once the case is filed, much of the work is finished until the government makes it's initial decision whether or not to intervene in the case. If that decision is "no", the Relator can then reassess the case at that point and decide whether to proceed, whether to settle the case, or whether to file a voluntary dismissal, subject to approval by the government. If the government objected at that point, it would likely be forced to intervene to stop a dismissal. The key is to only file good cases, but you need to find them first!

 

Similar false claims act provisions for the United States and the states of California and Illinois provide that if the respective government does not intervene in the qui tam action and a Relator proceeds with the action, the court may award attorney's fees to the defendant(s) in the case, if a defendant ultimately prevails and the court finds that the action was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.

 

In Florida, however, the law is more stringent providing that in cases where the Florida state government does not intervene, that the court shall award attorney's fees and costs to any defendant that prevails in the action against the person bringing the action.

 

 

A typical false claims act case may appear as though it is an employment action case. For instance, a fact pattern such that an employer or management is coercing an employee to do some act that the employee knows is unethical, wrong, fraudulent or a crime, may come to light that relates to some claim made to a government agency for money.

 

In many instances that person is ultimately labeled as a trouble maker, black-balled, demoted and subsequently fired for some contrived reason.

 

 


 

WHAT IS THE FALSE CLAIMS ACT?

The False Claims Act, or Qui Tam Law, is designed to encourage citizens to expose fraud by accoding people a percentage of any damage award that is collected.

 

The Qui Tam laws were first passed in 1863, during the American Civil War, when Congress learned about the costs being charged to the government for goods and services. Some of the goods or services were never even delivered!

 

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THE CAPITOL OF THE UNITED STATES, CIRCA 1863

 

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