One of the government’s duties is to stop businesses from harming the public, whether through illegal dumping, fraud, negligence or so on. Since much illegal corporate activity takes place behind closed doors, out of view of law enforcement and inspectors, it can be difficult for the government to enforce the law.
This is one reason for a type of lawsuit known as a qui tam action. Under the federal False Claims Act, a qui tam lawsuit allows individuals to sue a party for filing a false claim against the government.
Though anyone can sue under qui tam, often it is a whistleblower employee who files the claim. Employees are the ones most likely to know about a business’ scheme to defraud the government. Filing suit can alert the government to the alleged fraud, and gives the Attorney General the chance to review the charges and intervene in the action. If the government does not get involved, the plaintiff can pursue the claim on their own.
To encourage individuals to file quit tam, the False Claims Act allows them to collect a share of the verdict, if the business is found guilty. If the government joins the suit, the person who initiated the suit can be awarded between 15 and 25 percent of the damages, if he or she was not part of the fraud. If the government does not intervene, the plaintiff’s share of the recovery will be between 25 and 30 percent.
Not only does a qui tam provide a possible financial opportunity, it gives employees and others the chance to serve the public interest. An attorney can help explain the process and evaluate a worker’s claim.