The Qui Tam Law

The Qui Tam provision of the U.S. False Claims Act is a carry over from English common law that allows private citizens to sue private companies on behalf of the federal government when the private person has information of fraud being committed by the company against the federal government. The type of fraud that can be committed by private companies against the federal government generally involves contract fraud.

The term "Qui Tam" is short for the Latin phrase "qui tam pro domino rege quam pro se ipso in hac parte sequitur". Roughly translated, this phrase means "he who sues for the King and for himself".

The False Claims Act became an official law in the early 1860s as a way to combat fraud being committed by defense contractors who took advantage of government needs at the cost of the taxpayers. During the Civil War, the government was defrauded by contractors selling horses and mules in bad health, rancid food rations, and faulty weapons, among other things.

The law was met with little success at first because private citizens were forced to finance the cases themselves. Since the creation of the law, it has been applied to all offices of government and has extended certain protections toward the private citizens who bring evidence of fraud to the attention of government officials. Private citizens who sue companies on behalf of the government are granted protection from retaliation, harassment, and in the case of internal employees, protection from wrongful termination. The law also allows the federal goverment to fund court costs associated with bringing down the fraudster.

In exchange for doing most of the leg work on behalf of the government, private citizens who sue the private companies may be awarded up to 30% of the total amount of damages collected from the company.

The private citizen in a Qui Tam scenario is traditionally referred to as the "Relator", but more commonly referred to as a "whistleblower". When the case has been filed by the Relator, the federal government may decide to step in and take control of the case or they may allow the Relator to handle the work by themselves. Cases which proceed without the assistance of the federal government have a lower success rate, but higher payout for the Relator. Though it has never been officially stated, it is often rumored that the government generally only intervenes when it thinks it has a chance at winning a case.

In regards to Qui Tam cases, there is no self representation, meaning that an individual may not proceed with a case under the False Claims Act without the representation of a licensed and qualified attorney. This rule helps prevent frivelous lawsuits from wasting the time of the courts.

Sources:

Larry D. Lahman. Bad Mules. The Oklahoma Bar Association.

Qui Tam. LawyerShop.com.