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Qui Tam Lawsuit Funding

A Qui Tam case is a case filed by a private individual against an entity that is defrauding the government. A person filing a Qui Tam case is not really part of the government and, in layman terms, the Qui Tam action is informally viewed as whistleblowing. The filing of the Qui Tam case is based on the False Claims Act where private individuals who are not affiliated with the government are allowed to file lawsuits against another individual or entity (usually federal contractors) who are defrauding the government. The fraud in a Qui Tam case is usually causing the government some financial loss. Because a Qui Tam case helps the government recover the amount defrauded from them, a person filing the Qui Tam case is entitled to 15% to 25% share of the recovered amount.
Qui Tam cases are often filed by private individuals who have first-hand knowledge of the fraud. In most cases, these are private individuals who are employees of the entity being sued. Government welcomes such Qui Tam cases because it is a good way to encourage whistleblowers to come out and help government from being billed fraudulently and discourage contractors from doing something that can defraud the government. However, not all Qui Tam cases are supported by the Government (Government joins the case to strengthen the claim). When a Qui Tam case is won and it was not supported by the government, the individual filing the case will get a 25% share of the recovered amount. This is because this is risky and has a lower chance of success. Whether the share is 15% or 25%, an individual filing a Qui Tam case usually receives a substantial amount because of the personal risk involved.
Qui Tam cases require knowledge of the fraud. The individual filing the case was not necessarily harmed when the fraud is committed. Information may be enough to pursue a Qui Tam case. However, the information must not be public knowledge unless the individual was the source of information before it became public knowledge. Such Qui Tam cases gain better chances of winning. Qui Tam cases are served to the government. The defendant will not even know that there is Qui Tam case filed until there is a court order served. Only then can the Qui Tam case is made known to the defendant with the understanding that the case is sealed. No one is allowed to disclose the existence of such a case so that the investigation of the government will not be affected.
Qui Tam cases need a representation from a lawyer. This is not a case where an individual can defend on his/her own. A good lawyer is essential in winning the case so choice of lawyer is a huge factor. Qui Tam cases may take years because the government investigation may take longer to complete. Government is open to settlement of Qui Tam cases. Court may be asked to lift the seal to allow discussions with the defendant. Most Qui Tam cases involve health care fraud and security contracts fraud. Fraud of such magnitude can affect the welfare of a greater number of people.

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