Overview of the False Claims Act and Its Qui Tam Provisions

Attempting to curb a rash of fraud against the government, Congress passed a law that created incentives for private individuals to report persons engaged in fraud against the government. President Lincoln signed the law, called the False Claims Act (“FCA”) on March 2, 1863. Also known as the “Informer’s Act” or “Lincoln’s Law,” the original FCA prohibited various acts designed to fraudulently obtain money from the government. Congress initially adopted the FCA with the intention of combating fraud against the United States Army during the Civil War.

Although the legislative history of the Act focused specifically on fraud committed by military contractors, the Act applied to fraud committed by all Government contractors. Under the original FCA, defendants were subject to both civil and criminal penalties. There was also a $2000 fine for each fraudulent claim in addition to a penalty of double the government’s actual damages. Under the 1863 Act, private individuals known as “relators” could pursue this remedy through a “qui tam” action, and the informer was entitled to half the total recovery.

The term “qui tam” refers to the Latin expression “qui tam pro domino rege quam pro se ipso in hae parte sequitur,” which means, “who sues on behalf of the King as well as for himself.” The justification for allowing qui tam litigation was to encourage citizens to report wrongdoing against the government, wrongdoing that---absent the qui tam provisions---would likely go unnoticed. In short, the government hoped that economic incentives would promote private enforcement of federal legislation.

Over the years, Congress has amended the FCA twice. The most recent amendments occurred in 1986 and constitute the most extensive changes to the Act since its creation. They were designed to promote incentives for whistleblowing insiders and prevent opportunistic plaintiffs. The new changes created greater incentives, both financial and procedural, for private citizens, or qui tam whistleblowers to "blow the whistle" against unlawful conduct. Below are links to more in-depth discussions on various provisions of the FCA.

For more information and case citations, please see “Federal False Claims Act and Qui Tam Litigation,” published by Law Journal Press (2006).

For more information, email quitam@bafirm.com.

Notice

This website is designed to provide general information only. This information is not and should not be construed to be legal advice. The transmission of the information found on this website also does not result in the formation of a lawyer-client relationship.

You should be aware that qui tam claims are subject to a Statute of Limitations. The area of limitations periods is complex. There are also first to file rules, public disclosure bars, original source issues, and varying limitations in pursuing retaliation claims. If you wish to pursue your claims, you should promptly seek the opinion of an attorney regarding the merits of your qui tam claim and the applicable statute of limitations.