Risk Management Series : Qui Tam Provisions
Welcome back to MD Ranger’s blog series on risk management! We hope that these articles will help both you and your organization understand the ever-increasing need for strict, internal compliance procedures. So far, we’ve touched upon individual accountability in corporate wrongdoing and the laws used to hold individuals accountable for their actions. This week’s installment is dedicated to qui tam lawsuits, and practical ways to avoid them.
I may sound like a broken record, but the False Claims Act (FCA) violations are serious business. Submitting false claims to the federal government–regardless of your intentions–is a surefire way to land yourself in hot water. Part of what makes the FCA such an effective tool is its qui tam provision.
According to whistleblower defense firm Phillips & Cohen, the qui tam lawsuit as a way for whistleblowers to help the government stop fraud. Under the FCA, any individual has the right to sue an entity they believe to have committed fraud against the government–and to recover funds on their behalf.
Whistleblowing can be an incredibly lucrative endeavor. More often than not, the government will rely on the efforts of individual plaintiffs. Why is this such an effective method? What does an individual have to gain by blowing the whistle on his organization? Money. And lots of it. A whistleblower could pocket up to 30% of the recoveries from a qui tam lawsuit. Recoveries from these suits can amount to hundreds of millions of dollars.
Whistleblowers are protected from employer retaliation by law firms dedicated to their protection. In addition, the FCA provides that whistleblowers are entitled to complete restitution in the event of their harassment. Qui tam suits are filed under seal and kept secret even from the accused party. Unless the government asks for the seal to be lifted, the accused could remain in the dark until served their papers.
Contrary to popular belief, whistleblowers are frequently high-performing individuals who report high levels of job satisfaction. They raise issues believing that their organization will respond positively to their criticisms. If the individual feels that their complaint is being ignored or improperly addressed, they resort to whistleblowing.
How should your organization approach these complaints? Here are a few best practices:
- Take the individual seriously. Listen to their complaints, and investigate promptly.
- Document everything. Keep track of all relevant interactions, and keep the individual in the loop.
- Explain. When you conclude your investigation, sit down with the individual to review your findings and explain your reasoning.