The Award For Blowing The Whistle
The False Claims Act (the “Act”) provides a monetary award to private persons who successfully bring a qui tam action. Under the Act, whistleblowers (or “relators”) are entitled to an award of 15 percent to 25 percent of the government’s recovery, if the government intervenes (or joins) the qui tam action. Whistleblowers who proceed with a qui tam action after the government declines to intervene are entitled to an award of 25 percent to 30 percent of the government’s recovery.
The relator’s award is calculated using the amount the government actually recovers, not its alleged losses. There is no definitive formula to determine the percentage to be awarded. The government considers a number of factors, including the significance of the information provided by the relator, the contribution made by the relator to the final outcome of the action and whether the government had any prior knowledge of the fraud. Other factors that can increase or decrease the award include: whether the relator promptly reported the fraud; whether the relator tried to stop the fraud or report it internally through corporate channels; whether the relator hand first-hand knowledge of the fraud or based the claim on publicly available information; the size of the fraud; the credibility of the relator; whether the relator followed the Act’s procedures for filing a qui tam action (e.g., not providing a disclosure statement or speaking publicly about the action while it is under seal); and whether the government had to develop the facts to win the action. The relator’s involvement in the violation is also a factor to be considered. However, if the relator is convicted of a crime associated with the false claim, the relator is barred from receiving an award.
In addition, the Act provides that a relator may be awarded “reasonable expenses which the court finds to have been necessarily incurred plus reasonable attorneys’ fees and costs.” These expenses are paid by the defendants.
If you have knowledge of a fraud committed against the government, you may be entitled to receive an award if you report the fraud and the government successfully recovers on the claim. For more information about whistleblower awards contact Freiberger Haber LLP.