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Awards in Qui Tam Actions

Qui tam actions carry with them the potential for substantial monetary judgments, a portion of which will go to the person who initiated the action. Following is an overview of damages, penalties, and awards in connection with qui tam actions.

Damages and Penalties

A defendant found liable in an action under the False Claims Act is liable to the federal government for three times the amount of monetary damages sustained by the government, plus a penalty. If the defendant fully cooperated with the government's investigation, and turned over all information about the wrongdoing within thirty days of learning about the wrongdoing, the defendant's damage liability will be reduced to twice the amount of damages sustained.

In addition to the damages set out above, a defendant found liable will be required to pay a penalty for each false claim submitted. The penalty is set by the court, and is an amount between $5,000 and $10,000 per claim. This penalty is in addition to any amount fixed as damages.

Award for Bringing the Suit

The False Claims Act provides a significant monetary incentive for bringing a qui tam action. The person who initiates a successful qui tam suit receives a portion of the penalty and damage award, figured as follows:

  • No more than 10 %, if the government pursued the action, and the action is based on information brought out in a public report, or testimony;
  • Between 15 % and 25% of the award, if the government pursued the action, depending on the extent of participation by the person who initiated the suit; and
  • Between 25% and 30% of the award, if the government does not participate in the action.

The exact amount of the award is fixed by the court that hears the case. If the person bringing the qui tam action is also the person responsible for the wrongdoing or fraud, the award may be reduced by the court.

Other Awards

If a successful qui tam suit is brought without the participation of the government, the defendant will be ordered to pay the expenses of the lawsuit, including the attorney's fees incurred in bringing the suit.

Getting Legal Help with a Qui Tam Action

A qui tam action will not only vindicate the governmental and societal interests in fighting fraud. A successful action also carries with it the potential for substantial monetary awards to the person initiating the action. According to the United States Department of Justice, in just one year (the fiscal year ending September 30, 2003), the awards to private citizens initiating qui tam actions was $319 million. With so much at stake, you may wish to consult an attorney to help you reach a successful conclusion to your qui tam case.

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