Explaining Qui Tam Law "qui tam is a writ through which private individuals who assist a prosecution can receive for themselves all or part of the damages or financial penalties recovered by the government as a result of the prosecution. Its name is an abbreviation of the Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur, meaning "[he] who sues in this matter for the lord king as well as for himself."

 

Qui tam is a legal mechanism derived from the Latin phrase "qui tam pro domino rege quam pro se ipso in hac parte sequitur," which translates to "he who sues in this matter for the king as well as for himself." It allows private individuals, known as relators or whistleblowers, to file lawsuits on behalf of the government against entities or persons who have defrauded the government. In return, the relator may receive a portion of any financial recovery. This provision encourages citizens to expose fraud that might otherwise go undetected, especially in areas like government contracting, healthcare, and defense, where public funds are at stake. Qui tam actions are a form of public-private partnership in law enforcement, rooted in ancient legal traditions but most prominently codified in modern statutes like the U.S. False Claims Act (FCA).

Origins and HistoryThe concept of qui tam dates back to Roman law, where private citizens called "delatores" could initiate criminal prosecutions and receive a share of the defendant's forfeited property as a reward. This practice evolved in Anglo-Saxon England, with early examples including a 656 decree by Wihtred of Kent, which permitted informers to claim half the fine for reporting violations of Sabbath laws. By the 14th century, after the Norman Conquest, the English Parliament enacted numerous qui tam statutes to enforce commercial regulations and maintain official integrity. For instance, the 1318 Statute of York set uniform prices for goods and allowed informers to receive a third of forfeited merchandise for reporting violations. Similarly, the 1328 Statute of Northampton penalized unauthorized fairs, rewarding informers with a quarter of the forfeiture.Over time, qui tam provisions proliferated in England, targeting issues like bribery of jurors (1360) and conflicts of interest among customs officials (1442). However, abuses such as collusive suits led to reforms under Henry VII in 1487, criminalizing such practices. By the 19th century, qui tam had fallen into disrepute in England, often limited to enforcing Sunday observance laws, and was largely abolished by the Common Informers Act of 1951. Proposals to revive it based on the U.S. model emerged in 2007 but did not succeed.In the American colonies, whistleblower protections existed early on, and the concept was embraced by the first U.S. Congress due to limited federal law enforcement resources. A pivotal moment came in 1777 when naval officers Richard Marven and Samuel Shaw exposed misconduct by Commodore Esek Hopkins, leading to retaliation against them. In response, the Continental Congress passed the first U.S. whistleblower law in 1778, declaring it the duty of citizens to report fraud or misconduct and providing protections, including funding for legal defense against libel suits.Legal Basis in the United StatesIn the U.S., qui tam is primarily governed by the False Claims Act (FCA), codified at 31 U.S.C. §§ 3729–3733. Enacted in 1863 during the Civil War—often called the "Lincoln Law"—it targeted fraud by defense contractors, such as selling defective weapons or supplies to the Union Army. The FCA imposes liability on anyone who knowingly submits false claims to the government, uses false records to support such claims, conspires to defraud, or avoids obligations to pay the government. Penalties include treble damages (three times the government's loss) plus civil fines.The FCA was weakened in 1943 amid World War II pressures but strengthened by amendments in 1986, which enhanced whistleblower incentives and protections. Since 1986, the FCA has recovered over $48 billion in fraudulent funds. Other U.S. statutes with qui tam provisions include:

• 18 U.S.C. § 962: Arming vessels against friendly nations.
• 25 U.S.C. § 201: Violations of Indian protection laws.
• 46 U.S.C. § 80103: Removing undersea treasure from Florida to foreign nations.
• 35 U.S.C. § 292: False patent marking (qui tam provision removed in 2011 after being ruled unconstitutional in some cases).

Several states have their own False Claims Acts with qui tam provisions, allowing suits for fraud against state governments. Federally, the Department of Justice (DOJ) handles FCA cases, with the Fraud Section often investigating qui tam filings.In fiscal year 2024 (ending September 30, 2024), the DOJ recovered over $2.9 billion from FCA settlements and judgments, with a record 979 qui tam suits filed—surpassing the previous high from 2013. Many of these involved healthcare fraud, such as fraudulent billing, kickbacks, and unnecessary services.How the Qui Tam Process WorksThe qui tam process under the FCA is structured to balance private initiative with government oversight:

1. Filing the Complaint: A relator with direct knowledge of fraud files a lawsuit under seal in federal court, serving it on the government but not the defendant. The complaint must detail the fraud allegations. The seal allows the government time to investigate without alerting the defendant, though this can conflict with securities laws requiring disclosure of material lawsuits.
2. Government Investigation: The DOJ, often with the relevant U.S. Attorney's Office, reviews the case. The government may request extensions to the seal period for further investigation, including subpoenas or interviews.
3. Government Decision on Intervention: The government decides whether to intervene (take over the case) or decline. If it intervenes, it leads the litigation, and the relator assists. If it declines, the relator can proceed alone, but success rates are lower (around 20-30% without intervention versus higher with it). The government can still intervene later or dismiss the case if it deems it meritless.
4. Litigation and Resolution: If proceeding, discovery and trial follow. Settlements are common to avoid prolonged litigation. To qualify as a relator using publicly disclosed information, one must be an "original source" (e.g., having independent knowledge), as established in Rockwell International Corp. v. United States (2007).
5. Bars to Filing: Certain restrictions apply, such as the "public disclosure bar" (preventing suits based solely on publicly available information unless the relator is the original source) and prohibitions on pro se (self-represented) relators.

The process typically takes 1-5 years, with healthcare and defense fraud being common targets.Whistleblower Protections and RewardsTo encourage reporting, the FCA provides robust incentives and safeguards:

• Rewards: If the government intervenes and recovers funds, the relator receives 15-25% of the recovery, plus reasonable attorneys' fees and costs. If proceeding alone, the share rises to 25-30%. These percentages can be adjusted based on the relator's contribution. For example, in major cases, relators have received tens of millions.
• Protections: The FCA prohibits retaliation against whistleblowers, such as firing, demotion, or harassment. Relators can sue for reinstatement, double back pay, and other damages. The 1778 Continental Congress law set an early precedent for such protections. Additional laws like the Whistleblower Protection Act bolster these safeguards.

However, risks remain: relators may face blacklisting in their industry, and not all cases succeed. The DOJ declines intervention in about 75% of qui tam filings, though intervened cases recover the vast majority of funds.Qui Tam in Other CountriesWhile most prominent in the U.S., qui tam has historical analogs elsewhere. In Canada, it has limited application in common law provinces, with cases like Allen Qui Tam v. Jarvis (1871) using it to penalize unqualified legal practitioners, awarding informers a share of penalties. In England, as noted, it was largely abolished in 1951. Some countries, like Australia and India, have explored similar whistleblower reward systems but without full qui tam mechanisms.Examples of Notable Qui Tam CasesQui tam actions have led to billions in recoveries, often in healthcare (e.g., off-label drug marketing, kickbacks) and defense sectors. Below is a table summarizing some of the largest and most significant cases, drawn from prominent settlements. These illustrate the law's impact in exposing systemic fraud.

Case/Defendant	Settlement Amount	Year	Description of Alleged Fraud	Relator's Share (if known)
GlaxoSmithKline	$3 billion	2012	Illegal marketing of drugs like Paxil and Wellbutrin for unapproved uses, failure to report safety data, and false claims about efficacy, leading to fraudulent Medicare/Medicaid reimbursements.	Not specified (multiple relators)
Pfizer	$2.3 billion	2009	Off-label promotion of drugs like Bextra, violating FDA approvals and resulting in false claims to federal healthcare programs.	Initiated by a sales rep whistleblower
Johnson & Johnson	$2.2 billion	2013	Promoting Risperdal and other drugs for unapproved uses, plus kickbacks to physicians and pharmacists.	Not specified
HCA Healthcare	$1.7 billion (total across cases)	2003	Submitting false Medicare claims, overcharging, and providing unnecessary treatments; separate $631 million settlement for inflating expenses in cost reports.	Two whistleblowers in expense inflation case
Tenet Healthcare	$900 million	2006	Overcharging Medicare and illegal kickbacks for patient referrals.	Not specified
TAP Pharmaceutical Products	$875 million	2001	Fraudulent pricing and kickbacks to doctors to prescribe drugs, affecting Medicare/Medicaid.	Not specified
Amgen	$762 million	2012	Misbranding cancer drugs and deceptive pricing to healthcare programs.	One whistleblower
United States ex rel. Marcus v. Hess	$54,000 (recovered, plus penalties)	1943	Contractors colluded on inflated bids for public works, defrauding the government during Depression-era projects.	Relator received a share
United States ex rel. Alderson v. Quorum Health Group	$95.5 million	2001	Widespread fraudulent hospital billing practices.	Former employee whistleblower
United States ex rel. Rigsby v. State Farm	Significant jury verdict (amount not specified in sources)	2016	Falsely attributing Hurricane Katrina wind damage to flooding to shift costs to federal insurance.	Former adjusters as relators

These cases demonstrate qui tam's role in recovering funds and deterring fraud, with healthcare dominating due to programs like Medicare. For instance, the GlaxoSmithKline settlement remains the largest FCA recovery, highlighting pharmaceutical industry vulnerabilities.