In common law, a writ of qui tam is a writ whereby a private individual who assists a prosecution can receive all or part of any penalty imposed. Its name is an abbreviation of the Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur , meaning " who sues in this matter for the king as for himself."
The writ fell into disuse in England and Wales following the Common Informers Act 1951 but, as of 2008, remains current in the United States under the False Claims Act, 31 U.S.C. § 3729 et seq. , which allows for a private individual, or "whistleblower," with knowledge of past or present fraud committed against the federal government to bring suit on its behalf. This provision allows a private person, known as a "relator," to bring a lawsuit on behalf of the United States, where the private person has information that the named defendant has knowingly submitted or caused the submission of false or fraudulent claims to the United States. The relator need not have been personally harmed by the defendant's conduct. The information must not be public knowledge.
False Claims Act
Main article: False Claims ActThe False Claims Act (31 U.S.C. § 3729–3733, also called the " Lincoln Law ") is an American federal law which allows people who are not affiliated with the government to file actions against federal contractors claiming fraud against the government. The act of filing such actions is informally called "whistleblowing." Persons filing under the Act stand to receive a portion (usually about 15-25 percent) of any recovered damages. The Act provides a legal tool to counteract fraudulent billings turned in to the Federal Government. Claims under the law have been filed by persons with insider knowledge of false claims which have typically involved health care, military, or other government spending programs.
The American Civil War (1861–1865) was marked by fraud on all levels in the Union north and the Confederate south. Some say the False Claims Act came about because of bad mules. During the Civil War, unscrupulous early day defense contractors sold the Union Army decrepit horses and mules in ill health, faulty rifles and ammunition, and rancid rations and provisions among other unscrupulous actions. The False Claims Act, passed by Congress on March 2, 1863, was an effort by the USA to respond to entrenched fraud where the official Justice Department was reticent to prosecute fraud cases. Importantly, a reward was offered in what is called the " qui tam " provision, which permits citizens to sue on behalf of the government and be paid a percentage of the recovery.
The False Claims Act provides incentive to relators by granting them between 15% and 25% of any award or settlement amount. In addition, the statute provides an award of the relator's attorney's fees, making qui tam actions a popular topic for the plaintiff's bar. An individual bringing suit pro se, that is, without the representation of a lawyer, may not bring a qui tam action under the False Claims Act. See, for example, United States ex Rel. Lu v. Ou, 368 F.3d 773 (7th Cir. 2004).
Once a relator brings suit on behalf of the government, the Department of Justice, in conjunction with a U.S. Attorney for the district in which the suit was filed, have the option to intervene in the suit. If the government does intervene, it will notify the company or person being sued that a claim has been filed. Qui tam actions are filed under seal, which has to be partially lifted by the court to allow this type of disclosure. The seal prohibits the defendant from disclosing even the mere existence of the case to anyone, including its shareholders, a fact which may cause conflicts with the defendant's obligation under Securities & Exchange Commission or stock exchange regulations that require it to disclose lawsuits that could materially affect stock prices. The government may subsequently, without disclosing the identity of the plaintiff or any of the facts, begin taking discovery from the defendant.
If the government does not decide to participate in a qui tam action, the relator may proceed alone without the Department of Justice, though such cases historically have a much lower success rate. Relators who do prevail in such cases will get a higher relator's share, about 25% to 30%. It is conventionally thought that the government chooses legal matters it would prosecute because the government would only want to get involved in what it believes are winning cases.
History
Qui tam actions were first used in 13th century England as a way to enforce the King's laws. They existed in the United States in colonial times, and were embraced by the first U.S. Congress as a way to enforce the laws when the new federal government had virtually no law enforcement officers. The False Claims Act was passed in 1863 during the U.S. Civil War, but was substantially weakened in 1943 during World War II while the government rushed to sign large military procurement contracts. It was strengthened again in 1986 after a period of military expansion at a time when there were many stories of defense contractor price gouging.
The practice fell into disrepute in England in the 19th century by which time it was principally used to enforce laws related to Christian Sunday observance. It was brought to an effective end by the Common Informers Act 1951 but, in 2007, there were proposals to introduce legal provision on the U.S. model back to the United Kingdom.
Whistleblowers
“ Whistleblower ” can mean any person who reveals misconduct by his or her employer or another business or entity. The misconduct may be in the form of breaking the law, committing fraud, or corruption. That type of fraud can be a violation of the False Claims Act, or similar state and local laws. And a whistleblower who exposes fraud on the government can bring a qui tam lawsuit on behalf of the government, and can receive a share of the recovery as his or her reward.
Examples
Main article: PfizerIn September 2009, a former Pfizer Inc. sales representative, John Kopchinski, was awarded $51.5 million for his role as a whistleblower in the investigation of Pfizer's marketing practices of Bextra. Pfizer pled guilty to various civil and criminal charges and paid in total $2.3 billion to the government. The case netted the largest criminal fine ever imposed in the United States for any matter, $1.195 billion, and the largest civil fraud settlement against any pharmaceutical company. Qui tam "relators" are not eligible to receive shares of criminal fines. The $102 million that was distributed between the six whistleblowers was calculated from the fines paid in the civil settlement. Kopchinski's allegations were the basis for the majority Pfizer's assessed civil fine, and explains the size of his share relative to the other whistleblowers. Kopchinski and his attorneys filed the False Claims Act complaint in 2004 and alleged Pfizer systemically violated the federal Anti-Kickback statute, 42 U.S.C. § 1320a-7b(b) and the off-label marketing provision within the Federal Food, Drug, and Cosmetic Act ("FDCA"), 21 U.S.C. §§301-97. The qui tam provisions of the False Claims Act were triggered by the reimbursement for Bextra through Federal and State government programs, including but not limited to Medicare and Medicaid.
See also
- Private attorney general
- Parens patriae
References
- ^ Larry D. Lahman, "Bad Mules: A Primer on the Federal False Claims Act", 76 Okla. B. J. 901, 901 (2005) http://www.okbar.org/obj/articles_05/040905lahman.htm
- ^ a b "Why the False Claims Act?". The False Claims Act Legal Center . http://www.taf.org/whytaf.htm . Retrieved 2008-03-13 .
- ^ Walker, P (2007). "Fraud whistleblowers could get cash rewards". The Guardian . http://www.guardian.co.uk/uk/2007/may/24/ukcrime.immigrationpolicy . Retrieved 2008-03-12 .
- ^ http://www.usdoj.gov/usao/ma/Press%20Office%20-%20Press%20Release%20Files/Sept2009/PharmaciaPlea.html
- ^ http://www.fbi.gov/pressrel/pressrel09/justice_090209.htm
- ^ Berkrot, B (2009). "Pfizer whistleblower's ordeal reaps big rewards". Reuters . http://finance.yahoo.com/news/Pfizer-whistleblowers-ordeal-rb-1977940162.html?x=0&.v=1 . Retrieved 2009-08-03 . ...
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