In 1863 the federal government enacted the Civil False Claims Act, which also came to be known as the whistle-blower statute. Despite being given a derogatory colloquial name; the statute serves an essential purpose for dependency in government contracting. The law was strengthened in 1986 to provide a penalty of tremble damages in addition to 10,000 dollars per false claim against the defendant. The “whistle-blower,” now given the more pleasant term of “relator” may now collect between 15 and 30 percent of the recovery in these “qui tam” lawsuits. The recovery reward provides a great incentive for whistle blowers to act and maintain reliability within the federal contact industry. The filing process for the relator in qui tam cases is relatively
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Congress, with limited time and resources that may be better directed into other areas, does not have the time to personally investigate each fraudulent action against the federal government. So these qui tam cases are of the utmost importance. Furthermore, the law does not simply seek to recover monetary rewards from violators but rather is about discouraging the environment in corporate America that encourages a culture of fraud. Corporations, as a result of the strengthening of the statute, no longer reward a culture of deceit and now spend vast amounts of money on fraud regulatory boards and compliance programs. Some estimates allege the act saves the federal government 10 billion per year by encouraging a system of ethics and honesty within corporate government …show more content…
For starters, the Civil False Claims Act is a statute that is based on regulation and reliability; if a company is not doing anything wrong then they have nothing to fear from potential claims of fraudulency. Secondly, the inherent nature of such lawsuits presents risks for the relator. The whistleblower’s career is at stake when making fraudulency claims against their employer. If they did not have a strong case, why would a sane person risk their career over the mere possibility that the government might potentially pick up their case? Furthermore, it is not economically viable to pursue “frivolous lawsuits” as both the relator and the law firm representing them risk an enormous amounts of time, resources, and expenses. Additionally, if a court finds the lawsuit to be frivolous after the government fails to pick the case up, the relator may then become liable for the defendant’s attorney’s
Congress, with limited time and resources that may be better directed into other areas, does not have the time to personally investigate each fraudulent action against the federal government. So these qui tam cases are of the utmost importance. Furthermore, the law does not simply seek to recover monetary rewards from violators but rather is about discouraging the environment in corporate America that encourages a culture of fraud. Corporations, as a result of the strengthening of the statute, no longer reward a culture of deceit and now spend vast amounts of money on fraud regulatory boards and compliance programs. Some estimates allege the act saves the federal government 10 billion per year by encouraging a system of ethics and honesty within corporate government …show more content…
For starters, the Civil False Claims Act is a statute that is based on regulation and reliability; if a company is not doing anything wrong then they have nothing to fear from potential claims of fraudulency. Secondly, the inherent nature of such lawsuits presents risks for the relator. The whistleblower’s career is at stake when making fraudulency claims against their employer. If they did not have a strong case, why would a sane person risk their career over the mere possibility that the government might potentially pick up their case? Furthermore, it is not economically viable to pursue “frivolous lawsuits” as both the relator and the law firm representing them risk an enormous amounts of time, resources, and expenses. Additionally, if a court finds the lawsuit to be frivolous after the government fails to pick the case up, the relator may then become liable for the defendant’s attorney’s