What Exactly Is a Qui Tam Lawsuit?
In the United States, there are two kinds of qui tam lawsuits. The first kind of litigation is a "informant" or "whistleblower" case. This occurs when someone files a case under the False Claims Act (FCA). According to the FCA, a person may file a qui tam case against a defendant who has deceived the United States or participated in other illegal activities on behalf of the federal government, a state, or a local authority. The second kind of qui tam lawsuit is a "qui tam action" filed by the government and in which the government is the plaintiff. The most well-known example is the case of the United States v. Microsoft. In this case, the US filed a qui tam complaint against Microsoft, saying that the company was part of a larger conspiracy to deceive the government by preferring its Internet Explorer browser over Netscape. The government prevailed in the litigation.
What separates a qui tam suit from the majority of other civil cases?
Qui tam lawsuits are frequently regarded to be an arcane legal procedure in which a person sues a corporation or government entity and then agrees to keep any information that may expose the defendant concealed in exchange for a part of the compensation. The fact is significantly more convoluted. While qui tam proceedings and other civil cases have many similarities, they also differ considerably in a few critical aspects. One of the most fundamental contrasts is that a qui tam case has a far better possibility of success than a traditional lawsuit. The reason is simple. In a normal civil lawsuit, the plaintiff must prove that the defendant was actually responsible for their loss. As a result, the plaintiff must show that the defendant acted deliberately, recklessly, or negligently. In contrast, in a qui tam case, the plaintiff just has to show that the defendant made payment claims that were knowingly false or fraudulent. This is because the False Claims Act serves as the legal underpinning for qui tam cases. This legislation was enacted in 1863 in response to massive fraud during the Civil War.
The law's purpose is to encourage individuals to report fraud by providing an incentive to do so. This is achieved by allowing such individuals to bring lawsuits on the government's behalf and get a portion of any settlements. A qui tam lawsuit may be highly successful, but it also has drawbacks. One of the most significant disadvantages is the difficulty in finding someone willing to launch a qui tam action.
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