Damages and Rewards

Achieving Successful Outcomes

The qui tam provisions of the False Claims Act are designed to not only enable the filing of whistleblower suits, but for the purpose of encouraging and rewarding the filing of those suits by private citizens with knowledge of fraud upon the government. The False Claims Act imposes strong monetary penalties on violators of the False Claims Act, enables whistleblowers to share in the recovery of those penalties, and provides ample employee protections against retaliatory actions by an employer because of the employee’s whistleblower’s activity.

False Claims Act Damages and Penalties

Violation of the False Claims Act exposes an individual to significant damages and monetary penalties. An individual in violation of the False Claims Act may be subject to pay three times the amount fraudulently withheld, obtained, or otherwise defrauded from the government. Additionally, the court may impose a civil penalty ranging between $5,500 and $11,000 for each individual violation of the act.

Since 1986 when Congress made several substantial amendments to the utility and effectiveness of the False Claims Act, the government has recovered approximately $30 billion in False Claims Act settlements and judgments, over $9 billion of which was recovered in the past three-and-a-half years alone. An increased focus on health care fraud has accelerated a general trend of growing False Claims Act litigation as government and taxpayers alike seek to maximize the efficiency and accountability of those who handle taxpayer dollars.

Provisions of the False Claims Act focus upon protecting and rewarding whistleblowers who contribute to the government’s concerted efforts to recover taxpayer funds fraudulently obtained or withheld by violators of the False Claims Act.

Whistleblower Recovery and Rewards

Qui tam actions filed by whistleblowers have proven to be an essential element in driving successful recoveries of taxpayer dollars under the False Claims Act. To incentivize and reward whistleblowers who investigate, report, and help prosecute fraud, the qui tam provisions of the False Claims Act state that an individual who brings a successful False Claims Act lawsuit may share in part of the recovery obtained by the government at trial or through settlement, with the amount of the award varying on several factors.

Where the government intervenes in the qui tam action, the whistleblower may share in up to 25 percent of the total recovery obtained by the government. However, a qui tam action may proceed even in cases the government declines to intervene in, and if successful, the whistleblower may recover between 25 and 30 percent of the total recovery.

Whistleblowers considering whether to bring a False Claims Act lawsuit should ask questions and carefully evaluate which False Claims Act law firm to choose. While some law firms will not pursue cases the federal government declines, some firms have demonstrated a strong willingness to litigate meritorious cases even where the government is unable to intervene.

Whistleblower’s Award of Retaliation Damages

In addition to sharing in the government’s recovery of funds fraudulently obtained or withheld by violators of the False Claims Act, section 3730(h) provides recovery of damages associated with retaliatory employment actions. An employee unlawfully fired, discharged, demonted, or otherwise discriminated against as a result of lawful acts taken in furtherance of a False Claims Act action (such as reporting or investigating fraud, or expressing concerns to supervisors over potential false claims) is entitled under the False Claims Act to all relief necessary to make that employee whole. Relief under section 3730(h) of the False Claims Act may include reinstatement with seniority, double back pay plus interest, and any special damages sustained due to the discrimination including reasonable litigation costs and attorneys fees.

Recovery of Attorney Fees and Costs

Whistleblowers involved in a successful settlement or judgment may also receive payment from the defendant for reasonable expenses which the court finds to have been necessarily incurred, including reasonable attorneys’ fees and costs. Even if a whistleblower is not successful in their False Claims Act lawsuit, most litigation arrangments with False Claims Act lawsuits are contingency-based, meaning the whistleblower is not required to pay attorneys’ costs unless successful.

Though relatively rare, particularly where whistleblowers work with qualified whistleblower attorneys, a court has the discretion to require payment of reasonable attorneys fees and expenses to the defendant where the claim brought “was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.”

Introduction to the False Claims Act

The False Claims Act

False Claims Act Procedure

Achieving Successful Outcomes

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