Rewards in False Claims Act Complaints

Most people who come forward under the False Claims Act do so because they are extremely upset at unbelievably abhorrent conduct by their company. Absent a strong financial incentive, however, there is no real way to pursue the case, and some people do want such an incentive. To attract whistleblowers, the government offers rewards for False Claims Act complaints.

If you have knowledge of fraudulent activity, consult with an experienced DC False Claims Act attorney. They could go over the details of your case and help you make a decision about your legal options. If you decide to pursue a case under the False Claims Act, they could serve as your advocate and advisor through every step of the process.

False Claims Act Awards for Relators

When the first False Claims Act was enacted in 1863, the Senate made clear part of the concept was that they wanted a high incentive specifically in order to get co-conspirators to bring forward the information to the government. Attorneys do not think of it that way anymore, and the Act itself provides for reduced awards to anyone who is involved in planning or initiating the fraudulent action.

Even though the percentages for rewards following complaints are no longer 50% under federal law as they were under the initial False Claims Act, the general idea is similar. Today, the percentages are between 15% and 30% under federal law. Some state laws have higher incentives. The idea is that it should be a very clear, very powerful incentive for people to come forward and take the difficult and heroic step of blowing the whistle on fraud.

These incentives not only encourage whistleblowers to report fraudulent activity, which is the original intent of the rewards in False Claims Act complaints, but they often also make it possible for individuals to file cases. For instance, financial rewards may 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 False Claims Act relator awards, it would be impossible for most people to pursue a fraud case due to the lengthy investigation and court processes involved. Lawyers would have to charge clients directly, and most clients could not pay such fees upfront. As a result of these financial incentives, they can attempt to file a case on a contingent fee basis.

False Claims Act lawyers in DC will typically 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.

It is difficult to understand how some people accept the idea that there are always clear incentives for people to commit fraud, yet people have a problem with incentives for blowing the whistle on fraud. There is nothing wrong or immoral about whistleblowing, and there must be a very clear, strong incentive for those who would tell the truth.

This was the purpose of the law going back to the Civil War, and it has been successful in finding fraud, prosecuting fraud, and collecting billions of dollars for the United States government as well as curbing fraudulent practices in many industries where the cases have been successful. It is doing what it is supposed to do and it is an important factor in the law.

Available Damages in a False Claims Act Case

The False Claims Act provides for several ways to collect against defendants. If a case goes to trial and the defendant is found guilty, the government can assess treble damages against the defendant, which is three times the amount of damages. In addition, there is a provision for civil fines which has been adjusted for inflation so that the top civil fine is now over $20,000 per act.

There is liability for statutory attorneys’ fees, which means that it is possible to collect additional awards from the defendant, because the defendant has to pay to compensate for attorney’s fees. There is also a provision to sue under the False Claims Act for retaliation damages that allow for double back pay, reinstatement, and special damages. There is a great deal of liability that accrues to a defendant who commits fraud which is subject to this law if the plaintiff-relator and the United States are successful.

Negotiating Reward Amounts

The main issue in the statute as to the amount of an award, is whether the government has intervened in the case or not. If the government has intervened in the case, meaning the government took over the litigation, the reward range in the federal law is from 15% to 25%. If the government has not intervened or says ‘no’ to the case, and the plaintiff goes forward with it and is successful in obtaining an award without the government’s support, the range for a reward from a successful False Claims Act complaint is from 25 to 30% of whatever is collected under the case.

The specific percentage is a matter that can be determined between the relator and the government. In practical terms, it is usually a matter that is negotiated between the parties. The government has a set of factors that it refers to in making its offer. When the government intervenes in a case, the Statute says it should consider the extent to which the whistleblower substantially contributed to the prosecution of the action.

When talking about negotiating over percentages and money, there is some aspect of art to this as opposed to concrete science. The government may take into consideration whether the case had to go all the way to trial, whether the relator had to testify in a trial, whether the relator brought all the information to the table to begin with, and how much of the investigation was conducted by the government. There are a lot of ways the government can parse this in making its offer.

Negotiating Shares

The relators and the Department of Justice should always be on the same side in terms of fighting the defendants in a fraud action. Time and resources wasted arguing about relator’s share between the government and a relator are time and resources that should be put towards litigating additional cases and winning more proceeds for relators and for the government.

The government gets to propose to the relator what an appropriate relator share is, and then the relator has the option of litigating this issue. However, most of the time this is a matter which is negotiated. The published factors that the government relies upon in order to make its determination with respect to what a relator’s share should be are a little hard to understand, and they are even somewhat contradictory.

What a relator’s counsel will typically argue is that they helped as much as any whistleblower could, as well as the virtues of the particular relators. It may matter how far in the process the case has progressed, as there are all kinds of factors that the government may take into consideration when deciding on what share the plaintiff will receive.

Expectations of Relator Awards

Another issue that sometimes occurs is that sometimes individuals may not have realistic expectations of whistleblower rewards, or they may not have any expectations at all. An experienced whistleblower lawyer in the District of Columbia could inform an individual of their rights and what kind of rewards they could expect to gain after filing a claim.

Impact That the Value of a Case Can Have on the Reward

An individual’s expectations of whistleblower rewards in False Claims Act complaints, how much they can expect to recover, very much depend on the kind of case that an individual brings, the facts of the case and the damages involved. There is no set minimum value for relator awards under the False Claims Act, nor is there a maximum. One has to have some level of success in the pursuit of a claim, but there is nothing that limits the collection other than the size of the case itself.

The Range of Percentage Award

Similarly, state False Claims Acts have a range of percentage award. If an individual brings a case under a state law, there are similar provisions as to percentages in the federal law. There are also potentially awards to be made for retaliation claims within a False Claims Act. Those damages are damages directly suffered by a whistleblower, and they include two times the back pay for the lost wages, reinstatement damages. and other special damages. Those damages are different and accrue directly to the whistleblower, and of course they are limited by the actual damages suffered by the whistleblower.

Consult with an Attorney About Potential Rewards in a False Claims Act Complaint

Attorneys who represent whistleblowers in DC and across the country advocate for the rights of those whistleblowers to get a fair share of an award. However, lawyers also want to be able to set realistic expectations of rewards in False Claims Act complaints. The cases do not always succeed, but the cases that do succeed make it possible for lawyers to go forward and practice in this area.

So, the relator’s share is crucial to the survival of the law, and it is crucial to the survival of whistleblowing in general. A capable DC qui tam attorney can work to ensure that you receive a fair False Claims Act relator award for your willingness to cooperate, and that the government also receives their share. Contact a qualified lawyer in Washington, D.C. who can advocate for you and help you work towards the best possible outcome.