Qui Tam Lawsuit

A qui tam lawsuit lets a private citizen sue a company or person for cheating the government, and share in the recovery. The name comes from a Latin phrase meaning, roughly, "who sues for the king as well as for himself." In the United States the main vehicle is the federal False Claims Act, and many states have their own versions.

The process is unusual. The person bringing the case, called the relator, files the complaint under seal, meaning it stays secret while the Department of Justice investigates. The government then decides whether to intervene and take over the case or let the relator proceed alone. Common targets include health care billing fraud (Medicare and Medicaid), defense contracting, customs duty evasion, and fraud in federal loan programs.

The money can be significant. A person who violates the False Claims Act is liable for three times the government's damages plus a civil penalty for each false claim. Under 31 U.S.C. 3730(d), a relator receives at least 15 percent and up to 25 percent of the recovery when the government intervenes, and 25 to 30 percent when the relator pursues the case without the government. The law also protects employees from retaliation for reporting fraud.

Qui tam cases are not class actions. They belong to the government, have strict filing rules, and are usually handled by attorneys who focus on this area. Some rules can bar a case built on information that is already public. Our page on whistleblower and qui tam lawsuits explains who may qualify. For how private lawsuits differ more broadly, see class action vs. individual lawsuit.