How Do Whistleblower Rewards Work Under The False Claims Act?

Under the False Claims Act, whistleblowers who come forward with information regarding fraud against government programs can receive monetary rewards. These rewards seek to incentivize anyone with inside information regarding fraud against the government to come forward and shed light on unlawful activity by filing a qui tam lawsuit.

What is the History of the False Claims Act?

Enacted in 1863 during the American Civil War, the False Claims Act (FCA) sought to combat the abuse of federally funded Union Relief programs and curb war profiteering. The qui tam provision of the FCA has its roots in the old English legal mechanism of "qui tam pro domino rege quam pro se ipso in hac parte sequitur," which means "[he] who sues in this matter for the king as well as for himself." This procedure was groundbreaking in U.S. law, as it allowed private citizens to act as "private attorneys general" and file actions on the government's behalf.

Since its initial establishment, the False Claims Act has been revised multiple times and now includes fraud involving federal contracting, defense, and healthcare programs, as well as financial fraud. The Act is now one of the most important ways for the government to recover fraudulently dispersed funds. In the 2024 fiscal year, settlements and judgements for FCA cases totaled to more than $2.9 billion. Since the FCA was strengthened in 1986, FCA settlements and judgement have amounted to over $78 million.

In addition to setting a statutory penalty for violations, the FCA allows courts to treble (or multiple by three) damages, making the Act a seriously powerful tool.

How are Whistleblower Rewards Determined?

After a court enters judgment or a case has been settled, a percentage of the judgment or settlement is awarded to the whistleblower (also known as the relator) whose information helped bring the case forward. The percentage awarded varies from case to case, but the most relevant factor is whether the government elected to "intervene in," or take over, the case.

Monetary rewards for relators can be:

• 15%-25% of the case proceeds if there was government intervention; or
• 25-30% of the case proceeds if there was no government intervention.

However, a whistleblower's share may be reduced or even eliminated if he or she planned or initiated the fraud or was criminally convicted as a result of the investigation.

Filing a False Claims Act Lawsuit With Experienced Counsel

Given the scale and severity of the fraudulent schemes often involved in FCA qui tam cases, whistleblowers can be awarded tens and even hundreds of millions of dollars for their efforts. The largest whistleblower reward to date was approximately $266.4 million, awarded to a relator for his efforts in bringing suit against pharmaceutical company Biogen in 2022. The total settlement was $900 million.

Miller Shah has successfully litigated multiple qui tam cases under the FCA, resulting in meaningful whistleblower rewards. For example, in January 2020, Miller Shah negotiated a $54 million settlement with Teva Pharmaceuticals. In July 2020, Miller Shah helped broker a $642 million settlement with Novartis. The relators in these cases both received a portion of the settlements as whistleblower awards.

What Protections Against Retaliation Do Whistleblowers Have?

In addition to incentives, the False Claim Act recognizes that whistleblowers may face adverse action as a result of their disclosure and includes legal protections against retaliation. More specifically, under 31 U.S.C. § 3730(h) whistleblowers are protected from: termination, demotion, suspension, threatening conduct, harassment, and other employment discrimination. Thus, the FCA aims to legally protect relators from any undue consequences they may face in the workplace.

Conclusion

Whistleblower rewards under the FCA serve to incentivize people with knowledge about fraud on federally funded programs to come forward by providing monetary compensation to relators for their contributions to the case. It also ensures individuals who come forward to expose fraud do not face retaliation at work, supplementing incentives with protections.

Navigating an FCA claim is a complex endeavor, and whistleblowers should seek the support of competent qui tam counsel. Miller Shah has extensive experience litigating FCA cases and is committed to supporting whistleblowers with information about fraud against government programs. If you have any information regarding a potential False Claim Act case, contact Miller Shah here, or fill out the Contact form below.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.