Qui Tam

Qui Tam ("He who sues on behalf of the king as well as for himself") is a provision of the Federal Civil False Claims Act that allows a private citizen to file a suit in the name of the U.S. Government charging fraud by government contractors and other entities who receive or use government funds, and share in any money recovered.

Qui tam is a very effective and successful tool in fighting government procurement and program fraud. Congress reinforced Qui Tam by passing amendments in 1986 and now this law has equipped private citizens, who have independent and direct knowledge of fraud, with the ability to prosecute government contractors and others who are defrauding the Government and share in the recovery.

Under the qui tam provision of the False Claims Act, a relator (plaintiff) files an action on behalf of the U.S. Government. The False Claims Act allows a wide variety of people and entities to file a qui tam action. The more common types of relators are as follows:

Employees: An employee who blows the whistle on his or her employer is one of the most common types of relators. Experience has shown that employees normally file qui tam actions against their employers as a last resort after repeated attempts to resolve the issues internally. An important provision of the 1986 amendment protects employees who file an action, or assists in furthering an action, against job retaliation by the employer.

Former employees: This is another common type of whistleblower who files a qui tam action. A former employee files a qui tam action based on his or her direct knowledge of fraud on the part of their former employer. In many cases, the former employee was terminated or quit under duress as a result of trying to blow the whistle internally.

Competitors and Subcontractors: Another type of relator is the competitor of the company being charged or an employee of the competitor who has direct knowledge of the fraud being committed. Also, companies or persons who subcontract with a government contractor have filed qui tam actions against the contractor.

State and Local Governments: The 1986 Amendments gave state and local governments the power to be relators in qui tam actions. Since then, there have been a number of qui tam actions filed by local and state governments against contractors and medical providers as a means of recovering state or local revenue lost as a result of the schemes.

Federal Employees: A much maligned group are former and current federal employees who file qui tam actions. The Act, as amended in 1986, does not exclude federal employees from being a relator. However, when a federal employee does file a qui tam action, it results in considerable controversy and numerous court challenges as to whether the employee, due to his or her responsibilities, are obligated to disclose the fraud. The courts have been mixed on whether a federal employee has standing under The Act and the Justice Department remains hostile toward this type of relator.  Concerns have been raised as to whether a federal employee filing an action presents a type of conflict of interest.

The Act also allows a relator to file a qui tam action even if a "public disclosure" was made prior to the action being filed as long as the relator meets the "original source" test - the relator had "direct and independent knowledge" of the information on which the allegations were based and the relator "voluntarily provided the information to the government" prior to filing the action.

Some of the more common defendants in qui tam actions are:

Government Contractors and Subcontractors: The most common defendant in qui tam actions. Subcontractors can be charged if they cause a false claim to be presented to the Government through a contractor.

Medical Providers: Another common defendant in qui tam actions involving Medicare/Medicaid fraud. Includes doctors, hospitals, HMOs, and clinics.

Private Universities: Private universities have been charged as defendants in qui tam actions that involves their handling of federal grants and research and development money.

State and Local Government Agencies and Officials: Because they are recipients of large amounts of federal money, state and local entities can be defendants in qui tam actions.

In general, any organization or person who uses federal money can be charged as a defendant in a qui tam action.