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Selecting a Whistleblower Law Firm Is Now More Important Than Ever

April 14, 2023

For the first time cases declined by the government exceeded 1 billion in recovery in fiscal year 2022 under the False Claims Act.

It was bound to happen. With the glacial pace that qui tam cases tend to languish since the  based government is constantly triaging matters versus the incentive of private counsel to push cases forward, for the first time recoveries under the False Claims Act without government intervention exceeded government intervention.

Understanding the False Claims Act

To understand what that means, you need to examine the true nature of the False Claims Act – a statute meant to maximize the government’s ability to recoup monies for systemic frauds against it without depending on the government itself to do the bulk of the work. The statute contemplates a quasi public-private partnership and if the government trusts the right firms to do the right things, it can more efficiently budget its resources and attack the fraud against it to recoup more than the suspected $100 billion a year its defrauded. That’s right – the bigger and more bloated government becomes, the less oversight it tends to have and the more it depends on the whistleblower to come forward to blow the whistle on systemic fraud.

In recent years, we’ve seen a massive proliferation of fraud with pandemic related programs such as the PPP Loan program which were a lifeline to some businesses helping keeping people employed while the government was mandating shutdowns, but on the other hand was an endless feeding frenzy for unscrupulous individuals and businesses, sometimes just outright stealing the money, sometimes claiming funds which by statute the entity was ineligible for and others just laying off the workforce anyway and taking the money and running. The False Claims Act allows private individuals to remedy these injustices on behalf of the government, by allowing a plaintiff to relate the case of the United States government in a qui tam complaint.

However, it is not just pandemic-related fraud that the False Claims Act is concerned with. The Act has been used to recover billions of dollars in cases involving healthcare fraud, government procurement fraud, and other types of fraud against the government. Some of these cases were brought by whistleblowers without government intervention and resulted in settlements, highlighting the importance of selecting a whistleblower law firm with experience and expertise in navigating the complexities of the False Claims Act.

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Examples of successful cases under the False Claims Act

One such case involved a whistleblower who alleged that a pharmaceutical company engaged in off-label marketing of a drug, resulting in false claims being submitted to Medicare and Medicaid. The government declined to intervene in the case, but the whistleblower’s law firm pursued the case on their client’s behalf. The case ultimately settled for $345 million, with the whistleblower receiving a share of the settlement as a whistleblower reward for bringing the fraud to light.

Another non-intervened case involved a whistleblower who alleged that a government contractor had falsely certified that it had performed certain work under a contract with the Department of Energy. The government declined to intervene in the case, but the whistleblower law firm pursued the case and secured a $125 million settlement.

These cases demonstrate that even without government intervention, whistleblowers can still make a significant impact in recovering taxpayer dollars lost to fraud. However, it is important to choose a law firm that has the resources, experience, and commitment to see a case through to its conclusion.

Intervention under the False Claims Act is a concept that involves the sequence of the litigation.  In the first instance, while the case is under seal, the government is given the opportunity to litigate the case with its attorneys at the helm. If the government really likes the case or settles the case it may intervene and thereby cap the relator share at 25% of the government recovery.  If the government declines, it’s known as a non-intervention.  The non-intervention can take multiple tracks, one of which enable the relator and the whistleblower counsel to proceed.

The other in which the government insists on a dismissal.  It’s presently before the highest court whether a relator can proceed when the government wants dismissal because conceptually, the government is the victim in fraud under the False Claims Act and in other matters if the victim wants out the case should go away.  However, equally compelling, is that the government is the collector of taxes, not the taxpayer and the False Claims Act seeks to recover misused taxpayer’s monies, and sometimes the government just has an odd opinion on a matter, so the court, not the government should decide the dismissal.

In any event, as shown by the above instances, cases can succeed and prevail without the government, and in those instances the relator’s share is higher, up to 30%. So you might think it’s always better as a whistleblower for the government to not intervene due to the higher percentage. Well, the law of averages might disagree with you, since before 2022, the average whistleblower settlement with government intervention was $13 million, without it was $3 million.   So an average whistleblower award of 20% of $13 million is $2.6 million for the average intervened case, assuming the full 30% for a non-intervened case, that’s $900,000 in whistleblower rewards.  Of course, don’t count your checks until they hatch, as another factor in the equation is that there’s no guarantee any case will succeed, but with government intervention the success rate is much higher than without it.

Selecting the right law firm for your False Claims Act case

Selecting the right law firm  to go through this long process can make all the difference in the success of a False Claims Act case. The law firm should have experience in handling whistleblower cases, a deep understanding of the complexities of the False Claims Act, and the resources to pursue a case even without government intervention.

Whistleblower law firms also play a crucial role in protecting the rights of whistleblowers. The False Claims Act provides protections against retaliation for whistleblowers, but these protections are not always enough to prevent retaliation from occurring. A whistleblower law firm can help ensure that whistleblowers are protected and that their rights are upheld throughout the course of a case.

The False Claims Act is an important tool for recovering taxpayer dollars lost to fraud, and whistleblowers play a crucial role in bringing these cases to light. While government intervention is almost always preferable, non-intervened cases can still result in significant settlements, making it all the more important to select a whistleblower law firm with experience, expertise, and a commitment to fighting fraud.