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Mississippi Lawyer Blog

What Can You Expect From a False Claims Act Settlement?

The False Claims Act (FCA) was designed to be used as a mechanism for whistleblowers should they know of any individual, company or organisation who is committing fraud against the government.

Man in a shirt signing some papers 

The FCA allows the individual to sue on behalf of the government; the act allows the government to recover 300% of the original fraud plus any fines or penalties imposed. The whistleblower can expect to earn up to 15% of the recovery and attorneys' fees. This can add up to a huge amount of money, and many whistleblowers have earned millions for their troubles. Besides the money, what else can you expect from a False Claims Act settlement? We’ll take you through the process. But first.

What is Qui Tam and how does it relate to whistle blowing?

The Government will only instigate a lawsuit if they have something to gain or interests to protect.They might bring a lawsuit against someone who has committed fraud against the Government or against a company who has flouted environmental laws. The Government also understands that without any insider information, successful conclusions to these cases are unlikely. Qui tam allows someone other than the Government to bring a lawsuit on the Government's behalf. The words "Qui tam" originate from the Latin phrase "Qui tam pro domino rege quam pro seipse", which means "he who sues for the king as for himself."

The False Claims Act (FCA) has enabled the government to recover almost $20 billion in the last nine years in Medicare and Medicaid fraud cases; many of these claims have been initiated by private citizens.

Reporting

Reporting a company or individuals’ fraudulent or unsafe practices is the right thing to do. But, while whistleblowers stand to earn a lot of money, there can also be dire consequences for these individuals and their families. So, what exactly can you expect from a False Claims Act settlement procedure?

Filing a complaint

The process starts with the whistleblower filing a complaint. Whistleblowers are often current or former employees, but any member of the public who has knowledge about fraudulent activities can initiate a civil action. The whistleblower (also called the “relator”) will most often choose to remain anonymous; this can, however, be quite a challenging task and many do not succeed.

Claim assessment

Once the claim has been filed, the Government then assesses the claim and decide if it merits further investigation. Once the Government decides to intervene, the defendant company can either settle out of court or go to trial. At this a stage the Government may choose to involve the DOJ (Department of Justice), the FBI and any other relevant agencies to help with the investigation.

Decision time

Once the claim has been assessed the Government must now decide whether to intervene or not. They will carefully consider all evidence, and, depending on the likelihood of success, will either take the necessary action or not. It’s very important for the whistleblower to have legal representation, and also important to know that should the Government decline to intervene, the relator may still proceed with the case, independent of the Government.

Settlement or Trial

Under many circumstances, False Claims Act cases are settled before trial.This may involve extensive negotiations between all sides, but it will still land up being the cheapest and quickest way to resolve/avoid a Qui tam lawsuit. When no settlement can be reached, a trial is often the only remedy. This can be lengthy and costly, and will take the form of similar federal lawsuits.

Punishment

Organizations or individuals found guilty in Qui tam cases under the False Claims Act can expect harsh punishment. A maximum sentence could see a guilty party paying up to three times the amount of the fraud or losses incurred. Add to this penalties of up to $11,000 per false claim and many guilty parties may not recover from such a financial burden. The whistleblower stands to earn up to 30% of the recovered money.  

Do the right thing

Deciding to blow the whistle on fraudulent activities is both vital to our democracy and to our economy. The more honest and brave people stand up and say “No More”, the more the greedy, powerful and corrupt will think twice before engaging in unlawful and fraudulent activities. While the media used to be thought of as the third estate, it’s often ordinary citizens who are leading the fight against corruption.

Whistleblowers play a crucial role in bringing dishonest companies and people to book; their actions help to protect some of the country’s most vulnerable families and individuals from fraud and malpractice. If you would like more information about how you as a whistleblower can be protected and rewarded, you can download our  Essential Guidance On Qui Tam and Whistleblower Lawsuits.


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Disclaimer: This blog is intended for general information purposes only, and is not a substitute for legal advice. Anyone with a legal problem should consult a lawyer immediately.

Disclaimer: This blog is intended as general information purposes only, and is not a substitute for legal advice. Anyone with a legal problem should consult a lawyer immediately.

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