Whistleblower Lawsuits

 

Qui Tam is a truncated version of the Latin phrase "Qui tam pro domino rege quam pro se ipso," which translates to English as, "Who sues on behalf of the King, as well as for himself." Historically, Qui Tam provisions have allowed citizens to act as "private attorneys general" by bringing civil actions against those who violate the law.

Qui Tam provisions, which allow citizens to enforce the law against those who violate it, have existed for centuries. History finds the genesis of Qui Tam provisions in medieval England, during a time when no organized police force existed to enforce laws. English common law adopted various Qui Tam provisions in an attempt to provide for the enforcement of the law by those who suffered injury as a result of violations of the law. In effect, Qui Tam provisions allowed, and in fact encouraged private parties to act as policemen. The government paid a reward or bounty to the private party to make the effort worthwhile, and to give incentives to other individuals to bring similar suits.

Qui Tam provisions followed the settlers of the various American colonies. After obtaining their independence, the founders of the United States followed the English common law and included Qui Tam provisions in many statutes. Of the twelve penal statutes that the Continental Congress enacted, ten contained Qui Tam provisions.

President Abraham Lincoln urged Congress to pass the False Claims Act in 1863. Lincoln cited the numerous fraudulent suppliers who sold the Union Army faulty war supplies during the Civil War, including broken rifles, rancid food, useless ammunition and lame horses and mules. The 1863 FCA provided both criminal and civil penalties, contained a Qui Tam provision, and permitted a whistleblower to collect fifty percent of the damages.

Seven decades later, in 1943, Congress amended the FCA to restrict the whistleblower's role under the False Claim Act. During World War II war profiteers once again sought to palm shoddy goods off on the defense effort. As originally written, the law permitted someone to race to the courthouse and file a civil suit after learning that a grand jury had criminally indicted a war profiteer. Congressional disgust over these "parasitic claims" led to amendments that effectively eliminated any role for whistleblowers. As a result of Congress' 1943 Amendments to the FCA, whistleblowers could only bring claims in cases where the government was otherwise unaware of the information precipitating the action. In addition, the amendments reduced the whistleblowers share of the monetary recovery from fifty percent to a maximum of twenty-five percent in cases where the government did not aid in the litigation and ten percent in cases where the government had some involvement.

As a result of the 1943 Amendments, the FCA and its Qui Tam provisions became virtual nullities. Between 1943 and 1986 citizens brought few cases under the FCA, and of those claims filed, whistleblowers faced great hardship in maintaining the claims. Most cases were dismissed in the preliminary stages based on procedural failures plaintiffs could not address as the result of the Amendments.

The need for and utility of whistleblowers and the Qui Tam action became apparent in the early 1980s. By 1985, nine of the ten leading military contractors in the nation were under criminal indictment, renewing Congressional interest in the law. In 1986, Congress focused its attention on the FCA as a way to combat rampant fraud against the government. With bipartisan support and President Reagan's blessing, Congress extensively amended the FCA to increase its reach and to reestablish the Qui Tam whistleblower as an effective anti-fraud tool.

Among the most important changes under the 1986 Amendments was a statutory definition of the required intent, which expanded culpability beyond those persons who purposefully defrauded the government. The amendment created liability for those who submitted false claims resulting from deliberate ignorance or reckless disregard for the truth of the information contained in the claim.

The amendments also increased the time within which a whistleblower could bring a FCA case. The 1986 changes increased the damages from double to treble, meaning that those found to have defrauded the government would pay three times the actual damages that the government incurred. Related to this change, under the 1986 Act, Qui Tam whistleblowers became entitled to between fifteen and twenty percent of the damages recovered when the government participates in the litigation or between twenty-five and thirty percent when the government declines to participate in the litigation. In addition, the reforms mandated that the defendant pay a successful Qui Tam whistleblower's attorney's fees, and protected whistleblowers from retaliation by their employers.

Since the 1986 Amendments, Qui Tam suits have proved successful beyond even Congress' expectations. As awareness of the Qui Tam provisions spreads, more and more whistleblowers are coming forward. By 2000, fourteen years after the 1986 Amendments, the FCA, and especially its Qui Tam provisions, has become the single most successful tool in the government's fight against fraud and abuse. Whistleblowers pursued more than 3000 successful Qui Tam claims, and courts had awarded over $3 billion dollars in damages.



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