No one wants to be involved in litigation of any kind. It takes time and resources away from your priorities and makes it hard to focus on what matters to you: your business. If you’re not familiar with the term ‘qui tam’, you’re not alone. But if you suddenly find yourself embroiled in such a lawsuit, you need to understand the basics.
The False Claims Act
Qui tam actions are authorized in the federal False Claims Act. Generally, the Act exists to prevent instances of fraud against the federal government. Submitting false claims, either to obtain money from the government or to avoid paying money, are barred by the Act. A qui tam action is when a private citizen files suit, on their own, but on behalf of the government.
The False Claims Act, therefore, allows employees to file suit against their employer, alleging that the employer has violated the Act and defrauded the government. When a qui tam action is filed, the government has the option of either joining the suit or allowing the private citizen to proceed on their own.
It’s important to understand that the False Claims Act provides potentially substantial awards to employees who successfully bring a qui tam action. This increases the danger that any individual suit is actually frivolous in nature, with the employee hoping for a financial windfall. Combined with this fact is the complexity of the False Claims Act itself. Simply put, bringing a qui tam action is difficult to do correctly and easy to get wrong. So it’s important to get an early start on your defense strategy, to bring the suit to a close as quickly and efficiently as possible.