Qui Tam Lawsuit – How Do They Work?

Qui Tam cases are lawsuits filed on behalf of the government by private citizens for false claims or fraud. False claims generally include not delivering goods that were sold, overcharging for goods or services, making false statements about the quality of a product, improperly testing a product or any other scheme that is designed to defraud the government.

In the 1980’s, most Qui Tam lawsuits involved defrauding the defense industry. Fraud involving Medicare, Medicaid, employment law, environmental law and billing practices are the most common forms of Qui Tam cases today. These false claims are brought under the False Claims Act, which also prevents employers from retaliating against employees who become whistle blowers.

How it works

An individual filing a Qui Tam lawsuit is known as a ‘relator’ and must comply with the requirements of the False Claims Act. If the suit is successful, the relator may generally recover between 15 – 30% of the government’s total recovery along with additional civil penalties. Qui Tam verdicts and settlements can reach into the hundreds of millions of dollars, so a relator’s percentage can be substantial. Some recent Qui Tam settlements include:

  • Office Max / Office Depot: $14M
  • Pfizer: $49M
  • Amerigroup: $334M
  • AstraZeneca: $355M
  • Medco Health: $155M
  • Key West Pharmacy: $26M
  • Bayer: $257M

Words of caution Unfortunately, you don’t just file the suit and cash your relator check. Qui Tam cases generally take years to settle or litigate. Many relators are employees reporting fraud committed by their employer and many employers retaliate against the employee. Luckily, the False Claims Act protects employees from retaliation in the workplace. Very few Qui Tam cases are brought by private citizens alone. Due to the complexity of these cases, most hire attorneys who have experience in these matters.

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