Financial Incentives in the FCA

Of course, the law also provides powerful financial incentives, which can empower the whistleblower to fight fraud. If the case is successful, the whistleblower shares the amount collected by the government. Under the False Claims Act, a whistleblower can earn between 15 percent and 30 percent of the government’s collection. The financial incentives not only encourage whistleblowers to report fraudulent activity, which is the original intent of the rewards, they also make it possible for individuals to file cases.

The financial rewards make it possible for whistleblowers to hire the DC FCA attorneys needed to handle the complicated procedures required in filing court cases and to work with the Department of Justice as these matters are investigated.

Without the potential of a reward, it would be impossible for most people to pursue a fraud case due to the lengthy investigation and court processes. Lawyers would have to charge clients directly and most clients could not pay such fees up front. As a result of the financial incentives, False Claims Act lawyers will pursue the cases on contingency, thereby making it possible for whistleblowers who may not have funds to file and pursue them.

The law also helps right the imbalance of power between the employer, and the person who sees fraud committed. It provides legal recourse for those who suffer retaliation as a result of complaints made about fraud. Often, DC False Claims Act lawyers and legislators will speak of “whistleblower protection.” There are several laws entitled “whistleblower protection” acts. Unfortunately, this overstates the ability of the legal process to empower the whistleblower.

The law cannot usually go so far as to protect a whistleblower from being retaliated against by an unscrupulous employer. What it can do, and frequently does, is provide a way to sue for retaliation.

Under the Federal False Claims Act’s anti-retaliation provisions the whistleblower can sue for re-instatement, two times their back pay, special damages, and attorney’s fees. It can also be especially helpful to the whistleblower in that it allows a case involving employment law damages to be brought through the same court case as the related fraud case.

Whistleblower Rewards Bound to Government Recovery

The financial rewards a whistleblower earns are tied to the amount the government is able to recover. As explained above, the whistleblower has the potential to earn 15 percent to 30 percent of the government’s collection. The law also makes it possible for that collection to be relatively large because it includes a provision for treble (that is three times) the damages suffered by the government.

So, if the government lost $10 million  as a result of the fraud, the potential total collection under the law for damages would be 30 million dollars. This provision not only increases the potential awards, but also provides powerful leverage. By tripling the defendant’s potential exposure in any case brought under the Act, this provision creates strong incentive for defendants to settle a case.